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Methods for generating negative emissions: Are negative emission technologies a climatically and economically viable alternative to nature-based methods?

  • Global warming and its impacts on the environment, the human being and the economy are one of the biggest challenges of the 21st century. With the atmospheric carbon dioxide concentration being the main driver of global warming, the necessity arises to address the issue of carbon dioxide emissions. Next to the avoidance, the reduction and the compensation of emissions, negative emissions are moving into the focus of decision-makers in politics and in the economy. These can be created using either nature-based methods or negative emission technologies. The paper “Methods for generating negative emissions: Are negative emission technologies a climatically and economically viable alternative to nature-based methods?” aims to answer the research questions whether negative emission technologies are a more effective instrument to create negative emissions than nature-based methods and, under which circumstances an investment in these technologies is reasonable for a company. The method used to answer the questions is a literature research to perform a comparison of two examples. The afforestation project Bonn Challenge serves as example for a nature-based method to create negative emissions while the Direct-Air-Capture plant “Orca” by the company climeworks AG is used as an example for a negative emission technology. A benefit analysis is conducted to assess the effect on carbon dioxide concentration and a net present value calculation is carried out to enable an investment decision under different scenarios. The paper finds that Direct Air Capture is a more effective way to reduce the atmospheric carbon dioxide than the afforestation. The crucial advantage of the technology is the permanent storage of the removed carbon dioxide and the immediate carbon dioxide effect. Furthermore, the results of the net present value calculation imply that in the short-term an investment in negative emissions is not economical. In the long run, rising prices for emission certificates and the possibility to sell removed and stored carbon dioxide or to offer carbon dioxide removal as a service can make an investment in negative emission technologies like Direct Air Capture reasonable. A condition for that is that the cost of carbon dioxide removal with Direct Air Capture is reduced to 100 $/tCO2 between 2026 and 2031 depending on the applied interest rate. Based on the found results, the paper suggests that from a climate protection perspective, negative emission technologies should not be seen as alternatives to nature-based methods but that different approaches to create negative emissions must be combined to meet climate targets. The paper also proposes that prices for emission certificates in the EU-ETS should be increased as soon as possible in order to promote an investment in negative emission technologies. Also, further research using more detailed data and covering more aspects is recommended.

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Author:Christopher Herbeck
Advisor:Frank Kramer
Document Type:Bachelor Thesis
Year of Completion:2021
Granting Institution:Hochschule Furtwangen
Date of final exam:2021/08/20
Release Date:2022/02/21
Tag:Carbon dioxide removal; Climate change; Negative emissions
Degree Program:IBW - Internationale Betriebswirtschaft
Functional area:Andere/Other
Licence (German):License LogoUrheberrechtlich geschützt