Developing a Carbon Dioxide Removal Program in California

Carbon dioxide removal (CDR) involves the application of chemical or biological processes by which CO2 can be removed from the atmosphere and stored in reservoirs including living biomass (like forests), long-lived wood products, soils, oceans, and underground (geologic) storage sites. CDR is a complement to mitigating (avoiding) GHGs to prevent their buildup in the atmosphere, the cause of climate change.

The 2015 Paris Agreement, adopted by nearly 200 countries under the auspices of the 1992 United Nations Framework Convention on Climate Change, established the aim of limiting the global average temperature increase from global emissions of greenhouse gases (GHGs) to less than 2.0°C, and as close to 1.5°C as possible, to limit dangerous consequences of climate change. Achieving that aim will require a concerted international effort to reduce the release of GHGs to the atmosphere to zero by midcentury.

Many analysts have concluded that achieving the Paris temperature limits is infeasible without major increases in CDR, even with aggressive measures to limit GHGs-which have not yet been achieved. Furthermore, net-negative emissions removal (above and beyond what is achieved by a net-zero economy) will be necessary to reduce the stock of atmospheric CO2 if, as is currently feared, emissions overshoot the trajectory for achieving the Paris temperature limits.

However, few countries have set removal goals (Smith et al. 2023; Coalition for Negative Emissions 2021; Environmental Defense Fund 2021; Committee on Developing a Research Agenda for Carbon Dioxide Removal and Reliable Sequestration et al. 2019; IPCC 2018). Moreover, the nature and design of policies to motivate and finance the necessary amounts of CDR have received little attention until quite recently. Meeting the technological and economic challenges requires rapid and significant advances in CDR capability, plus financing and installing massive amounts of CDR going forward. Policymakers must ensure that reliable CDR gets built and used, with technologies that are reasonably ready for commercial-scale application; that investments are cost-effective; and that equity and fairness issues are addressed with attention to community effects, community participation, environmental protection, and environmental justice.

This paper examines a pioneering effort to establish a policy structure for CDR in California. Submitted to the California legislature in early 2023, Senate Bill (SB) 308, the Carbon Dioxide Removal Market Development Act, proposed that participants in the state's emissions trading system (ETS) be required to reduce their remaining emissions by increasing percentages over time through investing in CDR (or other means). The fundamental aim was to kickstart a commercial CDR market. The original version of the bill included provisions for regulatory oversight of CDR projects, financial responsibility of project developers, monitoring and verification, and the interests of communities adjacent to CDR facilities. The bill was substantially revised in ways that removed the CDR mandate and other key provisions, leaving decisions to be made subsequently by regulators. The bill did not make it out of the State Assembly's appropriations committee and died near the end of the legislative session, in August 2024.

SB308 brought to the fore issues that need to be addressed in any subsequent effort to establish a CDR program in California, or any other jurisdiction. The intent of this retrospective analysis is to highlight those issues, discuss how SB308 addressed them, and identify gaps that could be filled and changes that could be made in future efforts.

Michael A. Toman

Senior Fellow

Michael A. Toman is a Senior Fellow at Resources for the Future. His current research interests include climate change adaptation, international climate policy, energy and economic growth, and sustainable development.

Alan Krupnick

Senior Fellow; Director, Industry and Fuels Program

Alan Krupnick is a senior fellow at RFF.

Suzanne Russo

Fellow; Director, Environmental Justice Initiative

Suzanne Russo is a fellow and director of the Environmental Justice Initiative at RFF.

Dallas Burtraw

Darius Gaskins Senior Fellow

Dallas Burtraw is the Darius Gaskins Senior Fellow at RFF. Burtraw's research includes analysis of the distributional and regional consequences of climate policy and the evolution of electricity markets, including renewables integration.

Brandon Holmes

Research Analyst

Brandon Holmes is a research analyst at RFF.

Nicholas Roy

Research Associate

Nicholas Roy is a research associate at Resources for the Future, where he analyzes policies that include clean energy tax credits, renewable energy standards, and emissions pricing.

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