State Sequestration: Federal Policy Accelerates Carbon Storage, But Leaves Full Climate, Equity Protections to States

The Intergovernmental Panel on Climate Change—the UN’s expert science panel—has found that limiting climate change to prevent catastrophic harms will require at least some use of carbon capture and sequestration (CCS) unless the world rapidly shifts away from fossil fuels and reduces energy demand. There is significant uncertainty, however, about the level of lifecycle GHG reductions achievable in practice from varying CCS applications; some applications could even lead to net increases in emissions. In addition, a number of these applications create or maintain other harms, especially those related to fossil fuel extraction and use. For these reasons, many environmental justice advocates have strongly opposed the deployment of CCS applications.

The recently-enacted Inflation Reduction Act (IRA) supercharges incentives for CCS, providing tax credits that bring CCS application near estimated costs of deployment. But neither the IRA nor other federal laws create a comprehensive framework to regulate CCS. Against this backdrop, U.S. states implementing climate policies will likely play a key role in determining whether and in what circumstances CCS is deployed in the U.S. This Article describes these state-federal dynamics and concludes by identifying climate and equity issues that “leadership’ states should consider and potential legal tools that can be used to address those considerations.