Asset owners must immediately scale investment into impactful carbon management and negative emissions technologies both inside and outside of value chains, according to a new position paper from the UN-convened Net-Zero Asset Owner Alliance.

The paper highlights how carbon dioxide removal (CDR) solutions – including a mix of land-based carbon sinks, nature-based solutions, and technological carbon removal approaches, complementary to fostering deep cuts to GHG emission across all systems – must be scaled massively and rapidly to align with a 1.5C pathway.

The paper warns that under-investment and failure to develop nascent CDR pathways now risks them not being available as an important resource when needed at scale.

The body that has $6.6tr of assets under its management has now called for policymakers to fix the carbon-pricing issue as a priority, but – as a complementary measure –will support voluntary carbon markets, which require a significant ‘quality boost’.

The use of carbon credits as complementary instruments to abatement strategies requires an immediate increase in the quality of carbon credits, leading to higher carbon prices. In essence, this means formalising the use of carbon credits as a market proxy for a global carbon tax. This market proxy will grow, institutionalise, and increase the transparency and integrity of voluntary carbon markets – the best available solution in the absence of rising price corridors and policy support mechanisms.

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