Déjà vu all over again: Carbon dioxide removals (CDR) and legal liability

Abstract

As efforts to scale up the carbon dioxide (CO2) removals sector continue to expand, the question of liability for leaking or failed storage comes to the forefront. There are a range of possibilities and views as to who should be liable if leakage does occur, for example, one is that the party that purchased related removal units to offset emissions should be liable to ‘re-remove’ by replacing the defective removal units. Such a position may be problematic, for reasons set out in this paper. However, there is a need for a better understanding of both the permanence associated with a given CDR method and the risks that could impinge upon it. This paper contributes to that understanding by canvassing ways to address the risk of storage failure through legal approaches and structures. It does so by reviewing the comparable carbon market scenario that preceded entry into force of the Kyoto Protocol, then looks at the current situation in the voluntary carbon market and what implications scaling up the CDR sector may have. A number of legal approaches and structures that might address the risk of CO2 storage failing or leaking are canvassed and reasons why liability for on-going storage integrity should remain with the party that carries out the CDR project are elaborated. An institutional structure that builds on liability for on-going storage integrity remaining with the party that carries out the CDR project offers is proposed as the best outcome.

Keywords: Paris Agreement, carbon dioxide removals, scaling up, liability, storage failure, leakage, trading market units, replacements