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Regulating Removals: Bundling to Achieve Fungibility in GGR Removal Units

Justin Macinante, Navraj Singh Ghaleigh


Reduction in the levels of anthropogenic greenhouse gas (GHG) emissions, while essential, alone will not be sufficient to avoid continuing, damaging climate change impacts. Once the remaining global carbon emissions budget for limiting temperature increase to 1.5°C above pre-industrial levels is exhausted, more GHGs will need to be removed from the atmosphere than are emitted if this target is still to be achieved. Predictions indicate the remaining carbon budget for this target could be exhausted in the next decade. In these circumstances, it is apparent that GHG removal (GGR) technology needs to be scaled up significantly, and development of a market for removal units from GGR projects is one way to do so. As with carbon markets to date, there will be issues to be addressed, not least of which concern the legal and financial nature of the removal units and how removal units generated by different technologies might be fungible. This paper explores these issues, arriving at conclusions that removal units need to be characterised as constituting property and be defined as a financial instrument for the purposes of financial regulation. Heterogeneity of technical characteristics demonstrated by the different GGR methods, which would translate to the units, make determination of parameters by which they might be considered fungible, more problematic. Ultimately, given the public policy issues raised by any GGR market, these will be questions for policymakers. All the same, to help ameliorate difficulties confronting policymakers attempting to frame a GGR market, this paper proposes an alternative of considering the various GGR methods on a pooled or ‘bundled’ basis, rather than individually. This approach imports a number of advantages that enhance the potential for positive public policy outcomes in scaling up the GGR sector.

Justin Macinante, Research Fellow in Climate Change, Edinburgh Law School, University of Edinburgh: <>; Navraj Singh Ghaleigh, Senior Lecturer in Climate Law, Edinburgh Law School. This work was supported by the CO2RE Hub, funded by the UK’s Natural Environment Research Council (Grant Ref: NE/V013106/1).


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