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Income/expenditure Income for climate fund Income/expenditure (SSP−RCP1.9) Net carbon removal fund value Cumulative income Cumulative expenditure Cumulative interest –20 –10 0 10 20 –400 –200 0 200 2020 2040 2060 2080 2100 a b News in brief n climate change discussions, the Paris agreement and 1.5°C are the buzzwords today. The Sixth Assessment Report of the United Nations Intergovernmental Panel on Climate Change forecasts that warming will have reached 1.5°C already in the early 2030s – even if emissions are radically reduced in the near future. Most countries agree on the urgent need to act and emission targets are part of several ambitious international agendas, such as the recently adopted Climate Law by the European Union that not only aims to reach net-zero emissions by 2050, but plans to go into net-negative thereafter. In practice however, we are still emitting more carbon than we should and the carbon budget for the 1.5°C warming limit will probably be exhausted within this decade. At that point, we will start building up a carbon debt – a debt that has to be dealt with if we want to avoid a climate catastrophe. Despite the existing agendas to achieve net-zero emissions, there is generally a lack of strategy to repay this potentially costly debt. To bridge the gap between words and action, IIASA researchers and international colleagues have devised a practical framework for a future net- negative carbon economy. The researchers imagined a system, where carbon debt would be managed through so-called carbon removal obligations that hold corporations that continue to emit large amounts of carbon dioxide legally responsible to remove an equivalent quantity of carbon in the future. To deal with the risk of carbon debtors, the new emission trading schemes would treat carbon debt like financial debt and impose interest on it – as if corporations would pay a rental fee for temporarily storing carbon dioxide in the atmosphere. “Carbon removal obligations completely change how we see carbon dioxide removals: from magical tools to enable a 30-year long period of the grand atmospheric restoration project, to a technology option that is developed and tested today and flexibly and more incrementally scaled throughout the 21st century and possibly beyond,” says IIASA researcher and study coauthor Fabian Wagner. “Instead of overburdening future generations, carbon removal obligations imply a much more equitable distribution of financial flows and costs over time and it seems they will need to be an integral part of any successful climate mitigation policy in the future,” adds study lead author Johannes Bednar. This research highlights the need for immediate action to establish responsibility for carbon debt, hopefully influencing climate policy, for example, during the upcoming revision of the EU Emissions Trading Scheme. How will we deal with carbon debt? Johannes Bednar: bednar@iiasa.ac.at Fabian Wagner: wagnerf@iiasa.ac.at Further info: pure.iiasa.ac.at/17312 | www.iiasa.ac.at/news/21-carbondebt As the carbon budget for the 1.5°C climate mitigation scenario is running out, we need to solve the issue of the carbon debt that will inevitably build up if we continue business as usual. IIASA researchers and international colleagues have developed a new framework for a net-negative carbon economy, helping us achieve climate targets. By Fanni Daniella Szakal  Figure: a. Bottom, public income and expenditure from a tax on net emissions expressed as a percentage of GDP. b. Top, cumulative payments into the net carbon removal fund (green) and interest (orange) in theory pay exactly for cumulative tax expenditure (blue), such that the net value of the fund (brown solid line) gets exhausted as the warming target is achieved in 2100. 7Optionswww.iiasa.ac.at Winter 2021