Who Bears the Cost of the Last Tonne? Intergenerational Equity in Engineered Carbon Sinks

Who should pay for keeping carbon dioxide out of the atmosphere a century from now? That question sits at the heart of intergenerational equity in engineered carbon sinks. We write this guide for project developers, carbon credit buyers, and policy advisors who are designing or funding long-term storage solutions. By the end, you'll have a clearer framework for distributing costs fairly across generations—and avoiding the trap of pushing the hardest work onto our children.

1. Field Context: Where This Question Shows Up in Real Work

Intergenerational equity is not an abstract philosophy. It surfaces every time a carbon removal project submits a monitoring plan, signs a offtake agreement, or prices a tonne of CO2 stored. The core tension is simple: today's emitters benefit from cheap removal, but the risk of reversal—leakage, structural failure, or institutional collapse—falls on people who had no say in the decision.

Consider a typical direct air capture (DAC) facility paired with geological storage. The operator sells carbon credits based on 100-year storage guarantees. But the company may not exist in 50 years, and the monitoring fund set aside today might be eaten by inflation or mismanagement. Who then is responsible for verifying that the CO2 stays underground? In many jurisdictions, the answer is unclear.

We see this pattern across three common scenarios:

• Mineralisation projects that spread crushed olivine on beaches. The carbon is bound in stable carbonates, but the process is slow and monitoring spans decades. Who pays for long-term tracking when the startup that launched the project is acquired or dissolved?
• Biochar applications that claim carbon stays in soil for hundreds of years. Yet soil disturbance, fire, or changes in land use can release that carbon faster than expected. The farmer who applied the biochar may have no contract to monitor it after five years.
• Geological storage in depleted oil fields. The operator may be required to post a bond for post-closure monitoring, but the bond amount is often calculated using short-term discount rates that underestimate future costs.

In each case, the last tonne—the one that pushes the project from net-zero to net-negative—carries a disproportionate future liability. Yet few contracts explicitly allocate that liability across generations. Most assume that the current generation can price in all risks, an assumption that ignores deep uncertainty about future technology, regulation, and societal values.

This is not merely a theoretical concern. Several early carbon removal projects have already faced unexpected costs from monitoring equipment failure, regulatory changes, or the need for re-injection. The burden of those costs often falls on the entity that happens to be holding the liability at the time—which may be a government agency or a community that never benefited from the original carbon credit sale.

2. Foundations Readers Confuse

A common misunderstanding is that carbon removal credits are permanent once purchased. In reality, permanence is a function of the storage medium, the monitoring regime, and the institutional safeguards in place. A credit that claims 1,000-year storage is only as good as the contract that enforces it—and contracts expire.

Another confusion is the idea that discounting future costs solves the problem. Standard economic discount rates, say 5% per year, make a $1 million monitoring cost in 50 years look like only $87,000 today. That encourages underfunding. But future generations cannot discount their exposure; they face the full cost if the storage fails. Discounting intergenerational costs is an ethical choice, not a neutral mathematical one.

Practitioners also conflate liability with responsibility. A company may be legally liable for a storage site for 30 years, but morally responsible for the carbon it emitted over its entire existence. Legal frameworks rarely capture this asymmetry. Many carbon removal standards require monitoring for only 10 to 30 years, after which the site is considered stable. Yet geochemical and geomechanical models show that some storage sites can experience delayed leakage due to pressure changes, seismic activity, or well degradation over centuries.

Finally, there is a tendency to treat 'permanence' as a binary attribute—either the carbon stays or it doesn't—when it is actually a spectrum. A project that retains 95% of stored carbon for 1,000 years may be considered permanent for most purposes, but the remaining 5% still represents millions of tonnes of CO2 released over time. Who accounts for that fraction? Current accounting frameworks often ignore it.

What 'Permanence' Really Means in Practice

When we talk about permanent storage, we mean that the carbon is unlikely to be released back into the atmosphere within a timeframe relevant to climate goals, typically hundreds to thousands of years. But 'unlikely' is not 'certain'. The IPCC notes that well-selected geological storage sites may retain 99% of injected CO2 over 1,000 years, but the confidence level is lower for novel methods like ocean alkalinity enhancement or in-situ mineralisation. Each method carries a different risk profile, and those risks change over time.

The Role of Institutions

Institutional continuity is a key factor that is often overlooked. A monitoring program run by a reputable university may last 50 years; one run by a startup may last 10. If the institution disappears, who takes over? Some jurisdictions have created long-term stewardship funds, but these are rare and often undercapitalised. The US Environmental Protection Agency's Class VI well program requires operators to demonstrate financial responsibility for post-injection site care for 50 years, but the adequacy of those funds is debated.

We need to think about institutional drift—the gradual erosion of capacity, funding, or political will over time. A monitoring plan that looks robust today may be abandoned in 30 years due to budget cuts or changing priorities. Intergenerational equity requires building systems that are resilient to such drift, not assuming it won't happen.

3. Patterns That Usually Work

Despite the challenges, several approaches have emerged that distribute costs more fairly across generations. These patterns are not yet standard, but they show promise.

Long-Term Stewardship Trusts

One pattern is to set up an independent trust fund at the start of a project, capitalised with a portion of the carbon credit revenue. The trust is designed to cover monitoring, maintenance, and remediation costs for the full duration of the storage commitment—often 100 years or more. The key is that the trust must be professionally managed, with a mandate to preserve capital and adjust for inflation. Examples include the Alberta Carbon Trunk Line's monitoring trust and some voluntary carbon market initiatives.

Performance-Based Payment Structures

Another pattern is to tie payment to long-term performance rather than upfront delivery. Instead of paying for a tonne of stored carbon today, the buyer pays a smaller upfront fee plus annual payments contingent on continued storage. This aligns incentives: the seller has a financial reason to maintain the site, and the buyer is not left holding a worthless credit if the storage fails after 10 years. This approach is used in some enhanced oil recovery projects with long-term monitoring requirements.

Intergenerational Contracts

A third pattern is to write contracts that explicitly name future generations as beneficiaries, with rights to enforce the terms. While legally novel, this concept builds on trust law and public trust doctrine. For example, a carbon removal project could be structured as a charitable trust with the atmosphere as the beneficiary, giving standing to future generations to sue for breach of contract. This is not yet common, but several legal scholars have proposed it.

Diversification of Storage Methods

Spreading storage across multiple methods and locations reduces the risk that any single failure becomes catastrophic. A portfolio approach—combining geological storage, mineralisation, biochar, and ocean-based methods—means that if one method underperforms, others can compensate. The cost of maintaining such a portfolio can be shared across many stakeholders, reducing the burden on any one generation.

4. Anti-Patterns and Why Teams Revert

Despite these promising patterns, many projects fall into the same anti-patterns. Understanding why can help you avoid them.

Assuming Short-Term Monitoring Is Enough

The most common anti-pattern is to assume that if a site is stable for 10 years, it will remain stable indefinitely. This assumption is convenient because it keeps upfront costs low and makes projects more attractive to investors. But it ignores evidence that some storage sites can experience delayed leakage due to geochemical changes or well degradation over decades. Teams revert to this pattern because long-term monitoring is expensive and there is no immediate penalty for underestimating it.

Using High Discount Rates for Future Liabilities

As mentioned earlier, applying a standard corporate discount rate to future monitoring costs makes them seem negligible. This is tempting because it improves the project's net present value and makes it easier to secure financing. But it transfers the real cost to future generations who must pay the undiscounted amount. Teams revert to this pattern because it is standard in financial analysis and because there is no regulatory requirement to use a lower social discount rate.

Ignoring Institutional Risk

Many project plans assume that the monitoring entity will exist for the entire storage period. This ignores the reality that companies go bankrupt, agencies lose funding, and political priorities shift. Teams revert to this pattern because it is difficult to quantify institutional risk and because addressing it—for example, by buying insurance or setting up a trust—adds cost.

Treating Carbon Credits as One-Off Transactions

When a buyer purchases a carbon credit, they often treat it as a finished product. They do not consider that the credit's value depends on continued storage. This anti-pattern is reinforced by carbon registries that do not require ongoing reporting after the crediting period. Teams revert to this because it simplifies the market and because buyers prefer a simple product.

5. Maintenance, Drift, and Long-Term Costs

Even well-designed projects face maintenance costs that can escalate over time. Monitoring equipment degrades, wells may need to be re-injected, and land use changes can affect surface storage. The cumulative cost of maintaining a geological storage site over 100 years can be significant—some estimates suggest tens of millions of dollars per site.

Institutional drift is a related challenge. A government agency responsible for oversight may see its budget cut, its staff shrink, or its mission change. A private company may be acquired by a firm that does not share the original commitment to long-term stewardship. These drifts are hard to predict, but they can be mitigated by building redundancy into the system—multiple independent monitors, automatic reporting requirements, and legal mechanisms that survive changes in ownership.

Climate change itself may increase long-term costs. Rising temperatures, more frequent extreme weather events, and sea-level rise can damage monitoring infrastructure, alter groundwater flow, and affect the stability of surface storage sites. Projects located in areas that become more vulnerable may require additional investment to maintain integrity. Intergenerational equity demands that we account for these climate-driven cost increases, not assume they will not happen.

One way to manage long-term costs is to set aside a portion of carbon credit revenue into a dedicated fund that can only be used for monitoring and remediation. The fund should be invested in low-risk assets that preserve capital, and its size should be reviewed periodically against actual cost data. Some projects have begun to do this, but the amounts are often based on optimistic assumptions about future costs.

6. When Not to Use This Approach

Not every carbon removal project needs a full intergenerational equity framework. Small-scale projects with short storage times, such as biochar used in agriculture where the carbon is expected to stay for only 10–30 years, may not warrant the complexity of a long-term trust. Similarly, projects that use storage methods with very high confidence of permanence, such as deep geological storage in stable formations, may be able to rely on existing regulatory frameworks.

However, the default should be to consider intergenerational equity whenever the storage duration exceeds 50 years or when the project involves novel methods with uncertain long-term behaviour. When the cost of setting up a trust or writing intergenerational contracts outweighs the benefits—for example, for very small projects—it may be acceptable to rely on simpler mechanisms, but the decision should be explicit and documented.

There is also a risk of over-engineering. Requiring every project to have a 100-year monitoring plan and a fully funded trust could make carbon removal prohibitively expensive, slowing deployment at a time when we need rapid scale-up. The goal is not to impose a rigid standard but to ensure that the costs are transparent and that future generations are not left with an unfair burden. A pragmatic approach is to require a sliding scale of safeguards based on the project's risk profile and duration.

Finally, intergenerational equity should not be used as a reason to delay action. The worst outcome is to spend so much time designing fair contracts that we fail to remove carbon altogether. We need to balance fairness with urgency, recognising that every tonne of CO2 that remains in the atmosphere today causes harm to both current and future generations.

7. Open Questions / FAQ

Q: How do we decide what discount rate to use for intergenerational costs?

There is no consensus. Some economists argue for a near-zero social discount rate when the stakes are as high as climate stability. Others use the rate of economic growth to discount future consumption. In practice, we recommend using a range of discount rates (0%, 2%, 5%) in sensitivity analyses and presenting the results transparently. The choice should be a policy decision, not a technical one.

Q: What happens if a monitoring trust runs out of money?

This is a real risk. To mitigate it, trusts should be required to maintain a reserve above expected costs, and there should be a backstop—usually a government agency or an industry pool—that can step in if the trust is depleted. Some jurisdictions have created 'orphan site' programs for abandoned oil wells that could serve as models.

Q: Can future generations waive their rights to enforce storage contracts?

Legally, this is complex. Future generations cannot consent to a contract today, so their rights are typically protected by law rather than by agreement. Some legal scholars argue that the public trust doctrine gives the state a duty to protect natural resources for future generations, which cannot be contracted away.

Q: Is it better to focus on reducing emissions rather than worrying about long-term storage?

Both are necessary. Emission reductions are the priority, but some emissions are unavoidable, and carbon removal is needed to address historical emissions. Ignoring long-term storage risks creating a future crisis where large amounts of stored carbon are released due to inadequate monitoring. The two goals are complementary, not competing.

Q: What is the single most important action a carbon credit buyer can take?

Ask the seller how long-term monitoring and liability are funded. If the answer is vague or relies on assumptions that future costs will be low, consider buying from a project that has a dedicated trust or a performance-based payment structure. Your purchase decision can drive better practices.

Next moves for practitioners:

• Review your project's monitoring plan for the full storage duration, not just the crediting period.
• Calculate the realistic cost of maintenance and remediation over 100 years, using a low discount rate.
• Set up a dedicated trust fund capitalised with a portion of carbon credit revenue, managed by an independent trustee.
• Include intergenerational equity clauses in offtake agreements that specify remedies if storage fails after the seller ceases operations.
• Support policy efforts to create public backstops for long-term carbon storage liability.