By Peter Eisenberger & Sasha Mackler
March 08, 2023
It is well known by now that the world’s climate system is increasingly out of balance, due to more than a century of accumulating carbon dioxide emissions in our atmosphere. The fossil fuel driven economy has, by and large, created a miracle of economic and social development but left us with a deeply challenging carbon problem that can no longer be ignored. There are three major ways to manage climate risk. First is to stop emitting through conservation and a shift to clean energy. Second is to enhance resilience to climate impacts. Third, is to remove emissions from the atmosphere. Each is insufficient on its own but together these three broad approaches represent the best coherent solution to the climate change problem.
The first two paths are squarely in the global policy mix. The role of carbon removal is not. The transition to cleaner sources of energy is a broadly shared imperative that is receiving strong support in many places. And while the global community is behind in its race to achieve net zero greenhouse gas emissions by mid-century, we are beginning to see a promising acceleration of efforts to bring forward new energy technologies. For example, the United States recently passed a series of clean technology laws that will collectively pour half a trillion dollars into low-carbon technology development, commercialization, and deployment in the coming decade. Likewise, support for investments in new infrastructure and adaptation responses is gathering momentum at home and abroad, which was a top priority at the global climate change conference in Egypt. And even though public appreciation for carbon removal is improving, our readiness to leverage this opportunity lags far behind the clean energy and adaptation pathways.
To be sure, policies and other actions supporting carbon removal are gaining steam. In the U.S., the federal government and some states have created generous incentive schemes aimed at driving deployment of machines that conduct direct air capture (otherwise known as DAC) including a well-funded program to invest in regional hubs and creating a generous new tax credit. This is a great start. But make no mistake, we have much more to do.
We now know that DAC and other forms of carbon removal can work. Enormous progress by technology developers (including at Global Thermostat, where one of us works) has demonstrated that DAC is no longer an academic fantasy. But its usefulness as a climate solution now centers squarely on questions of technology optimization, cost reduction, and scaling. The National Academy of Science and Medicine have concluded that tens of billions of tons of annual removals are likely to be needed by mid-century or sooner to achieve global climate commitments. This is a monumental goal, considering the current state of carbon removal is roughly 10,000 tons per year. In the International Energy Agency’s latest net zero scenario, DAC needs to achieve 60 million tons per year capacity by 2030. The IEA suggests we are on track for, at best, 5 million tons by the end of the decade, a remarkable increase from today but just a fraction of what’s needed to avoid the worst impacts of climate change.
While much has been achieved, more work remains not just to meet these long-term targets but also to ensure success of critical new programs, like the regional DAC hubs. There is a need to improve the investability of carbon removal, so private capital can complement public support. Currently, the market is flimsy with the business case relying on altruistic voluntary buyers. Ultimately, this must evolve toward a formal marketplace characterized by clear pricing and long-term bankability covering billions of yearly tons at no small cost.
There are several policy actions that could help. First, governments should take measures to support the development of a long-term market. This could be done initially by removing the time limit on claiming the tax credit for high-quality carbon removal. Eventually this could also be accomplished through direct public procurement of carbon removal services or the development of regulations that require removals associated with the production or use of fossil fuels. Another approach could center on the development of technology pathways that create new products utilizing captured carbon as a feedstock, like CO2-based polymers, carbon fiber, concrete, and even synthetic fuels, which would have premium value in the marketplace.
