Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/338270 
Year of Publication: 
2026
Series/Report no.: 
CESifo Working Paper No. 10169
Version Description: 
This Version: February 2026
Publisher: 
Munich Society for the Promotion of Economic Research - CESifo GmbH, Munich
Abstract: 
This paper develops a welfare and public economics perspective on optimal policies for carbon removal and storage (CDR) in permanent and non-permanent sinks. Non-permanent CDR reduces mitigation costs, even though the stored carbon is released into the atmosphere eventually. It may serve as bridge technology until permanent CDR becomes available. In contrast to permanent removals, non-permanent CDR does not reduce the optimal long-run temperature level. Its valuation differs from the social cost of carbon since a social cost of carbon removal arises from marginal damages caused by emissions released from non-permanent storage. We discuss three policy regimes that ensure optimal deployment of non-permanent CDR in terms of their informational and institutional requirements for monitoring, liability, and financing.
Subjects: 
carbon dioxide removal
carbon capture
social cost of carbon
climate policy
impermanence
JEL: 
D61
H23
Q54
Q58
Document Type: 
Working Paper
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