Abstract Carbon removal markets have failed to deliver liquidity, price discovery, or scale. This failure is institutional rather than technological. Current markets trade registry certificates that record past attestations, not claims on carbon or obligations governing its continued absence from the atmosphere. As a result, no object of custody exists; buyers acquire neither enforceable control nor ongoing remedies tied to stored carbon. Even if such claims were properly constituted, carbon storage would remain difficult to govern through markets because it is inherently location- and time-bound, resisting delivery, substitution, and exit in ways unlike standard commodities or property interests. This article identifies these problems in sequence. First, current certificate-based practice fails to create a carbon asset at all. Second, conditional on remedying that absence, genuine carbon claims would face binding constraints of custody and alienability: performance must be governed over time, and claims must be transferable without extinguishing accountability. Existing practices—particularly retirement as an end-state—foreclose these mechanisms by design. The article proposes carbon storage leasing as a canonical solution. Leasing reframes removals as time-bound, auditable, and enforceable services rather than consumptive acts resolved at certificate issuance. To scale, such contracts require institutional counterparties. Carbon Delivery Companies (CDCs) govern claims rather than projects, performing for carbon removals the functional equivalent of custodial and clearing roles long used in commodity and derivatives markets. Together, leasing and CDCs enable governable, transferable carbon claims and establish an institutional pathway compatible with asset-based carbon accounting.
Marc Roston (Wed,) studied this question.