Interesting, it seems like the key design choice is picking the reference price.
How would the reference / market price work in practice? Would it be calculated as an average of CDR technologies (e.g. reforestation + biochar + ERW + ... etc. all the way up to DAC?).
Or would you design a unique reference price for each technology? So reforestation would have one reference price, DAC another?
Yes, the reference price is the key element here. Might be tricky to calculate a reference price that is an average or weighted average of all CDR since that would beg the question of which data does one use for that, and for how far back would you go to create that historical average?
Speculating that there might be one reference price for durable CDR, another for ARR/IFM or other NBS projects.
I like the ETS price, though the spread would be large for most technologies for a long time.
I'm torn - one nice thing about energy markets is that the reference price is relatively simple, and there is typically only one reference price. So I'm a little wary of making it overly complex.
Having said that, I would probably do as you said with one difference:
- NBS / ARR / IFM has one price
- Geologic CO2 sequestration (in practice BECCS + DAC have the same price)
Don't have a strong rationale, thinking through groupings that split the difference between a narrow price band and roughly grouping solutions based on permanence and measure-ability. Could be persuaded.
Interesting, it seems like the key design choice is picking the reference price.
How would the reference / market price work in practice? Would it be calculated as an average of CDR technologies (e.g. reforestation + biochar + ERW + ... etc. all the way up to DAC?).
Or would you design a unique reference price for each technology? So reforestation would have one reference price, DAC another?
Yes, the reference price is the key element here. Might be tricky to calculate a reference price that is an average or weighted average of all CDR since that would beg the question of which data does one use for that, and for how far back would you go to create that historical average?
Speculating that there might be one reference price for durable CDR, another for ARR/IFM or other NBS projects.
What are your thoughts?
Possible to use the ETS price as a reference price as well.
I like the ETS price, though the spread would be large for most technologies for a long time.
I'm torn - one nice thing about energy markets is that the reference price is relatively simple, and there is typically only one reference price. So I'm a little wary of making it overly complex.
Having said that, I would probably do as you said with one difference:
- NBS / ARR / IFM has one price
- Geologic CO2 sequestration (in practice BECCS + DAC have the same price)
- Non-geologic permanent solutions (Biochar, Biomass Burial ERW, etc.)
Don't have a strong rationale, thinking through groupings that split the difference between a narrow price band and roughly grouping solutions based on permanence and measure-ability. Could be persuaded.