The optimal portfolio of emissions abatement and low-carbon R&D depends on the expected availability of negative emission technologies

Combining policies to remove carbon dioxide (CO2) from the atmosphere with policies to reduce emissions can potentially decrease CO2 concentrations to earlier levels. We model the optimal selection of a dynamic portfolio of abatement, research and development (R&D), and negative emission policies under an exogenous CO2 constraint and with stochastic technological change. We find that near-term abatement is not sensitive to the availability of R&D policies, but the anticipated availability of negative emission strategies can reduce near-term abatement if CO2 targets are sufficiently ambitious. Further, planning to develop and deploy negative emission technologies can shift optimal R&D funding from breakthrough carbon-free technologies into incremental lower-carbon technologies. Importantly, when the goal is to maintain the present CO2 concentration in the year 2100, an optimized portfolio with negative emission strategies can be 80% cheaper than an optimized portfolio lacking such strategies. However, the cost is not reduced by as much if concerns about tipping points rule out using late-century negative emission strategies to temporarily overshoot the CO2 target earlier in the century.