Is there still a case for Carbon Takeback or Carbon Removal Obligations in a world of low renewable energy costs?

Upstream regulatory measures to require fossil fuel producers and importers to pay for carbon dioxide capture and disposal, such as the Carbon Removal Obligation (CRO, Bednar et al, 2021) or Carbon Takeback Obligation (CTBO, Jenkins et al, 2021), provide a potentially valuable "backstop" mitigation policy if demand-side measures fail to reduce emissions fast enough to meet climate goals. But what if renewable energy costs fall much faster than envisaged in the current generation of integrated assessment models? Would these upstream measures then result in a substantial investment in carbon capture and storage (CCS, encompassing both direct-air and point-source capture) that is subsequently stranded because it is not needed? We explore the implications of ultra-low renewable energy costs under an idealised global CTBO regime and argue that over-building mitigation capacity is unlikely given current trends and in any case would represent a sensible precautionary investment. The risk of stranding of CCS capacity is directly linked to the long-term cost of both CCS and the extraction costs of fossil fuels, reinforcing the case for delivering CCS through obligations on the fossil fuel extraction industry in order to align incentives and ensure that those who benefit most from continued use of fossil fuels also shoulder the risks associated with the transition.