New Carbon at Risk framework standardises permanence risk across CDR technologies

A group of researchers has released the 'Carbon at Risk' (CaR) framework, a new methodology to standardise the measurement of permanence risks across different carbon dioxide removal (CDR) technologies. Inspired by 'Value at Risk' in financial markets, CaR is a probabilistic measure of the shortfall between contracted removals and realised storage at a given confidence level and time horizon. The framework aims to provide a common unit for comparing and pricing the risks of CDR technologies, addressing a current lack of standardised, quantitative permanence risk measurement in carbon markets. Its creators state that CaR offers a technology-agnostic basis for risk-calibrated buffer sizing, insurance pricing, and reserve-fund design. This initiative seeks to improve capital allocation by making risk assumptions explicit and auditable, moving beyond qualitative labels for CDR projects.

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