Factors Detracting from and Contributing to Technologies that Remove Carbon

Carbon removal technologies (CRT)* also know as technological carbon solutions, are essential for climate mitigation however, there are a host of factors that are impeding its implementation. One of the impediments to deploying CRT is cost related to the technology’s vast energy requirements. CRT at scale would consume vast amounts of energy, it is estimated that the large-scale deployment of DAC will require as much as a quarter of the world’s total energy demands by 2100 (Realmonte, 2019). There are also concerns that the energy required to power CRT at scale would generate emissions. Although some have suggested that this can be addressed by ensuring that these technologies are powered by renewable energy, this augurs concerns about whether CRT is the best use for emissions-free energy. There are also concerns that CRT will compete for resources. This includes the demands of NCS approaches like biomass production on soils (Garcia et al, 2019). It also includes demands on water resources and physical space. However, the salient issue is not viability, scalability, or even cost, the major obstacle that needs to be overcome is the lack of political will to provide the needed technological and economic policy support, as well as market and regulatory arrangements. Governments are not yet integrating CRT into their policy frameworks and technology roadmaps (Mac Dowell, Fennell, Shah and Maitland, 2017). The absence of political will and the failure of governments to enact supportive policies has been described by researchers, NGOs and energy companies as the “missing ingredient” for faster adoption of the technology (Budinis et al, 2016). As long as CRT is not a priority for policymakers we are not likely to see these technologies scale to the required size.

CRTs are not economically viable without subsidies and carbon pricing to help offset costs (Nace, 2019). Without carbon pricing there is no economic benefit to sequestering CO2 (Roberts, 2019). Many researchers including Fields have indicated that scaling DACCS requires carbon pricing (Peters, 2017). Even Shell has indicated that we need carbon pricing to help carbon capture and storage (CCS) achieve the climate goals laid out in the Paris Agreement (Quest Carbon Capture and Storage, n.d.). The Global Roadmap Study suggested that carbon pricing is necessary to help grow CCU (2016, Lux Research). Even in places where carbon pricing schemes exist the price doesn’t come close to the cost of technological approaches to capturing and storing CO2 (Jones, 2020).

Other barriers to CRT include major gaps in the overall CCS supply chain, a shortage of skilled labor, and negative public perception of the technology (Budinis et al, 2016). The general public is reticent to support CRT (Realmonte et al, 2019) because people don’t like change (Andrews, 2018). People are concerned about the potential adverse environmental side-effects from geoengineering (Mann and Toles, 2016). They are also concerned about adverse impacts on social sustainability related to CRT (Burns, 2017; Rogelj et al, 2018).

A major factor preventing environmental groups like Greenpeace and the Climate Justice Alliance from supporting the deployment of CRT is related to concerns that the technology would be used by industrial polluters as a license to keep polluting (Jones, 2020).

A wide range of factors may contribute to the implementation of CRT. As reviewed above government subsidies and carbon pricing mechanisms are essential. In practical terms, no single factor carries more weight than government action. Such action can take a wide range of forms from incentives to mandates. Just as subsidies created a marketplace for wind and solar, similar subsidies would help build out carbon technologies (Welch, 2019). This could include everything from tax breaks for CRT to laws that mandate companies remove more carbon from the atmosphere than they emit.

We have historical evidence that demonstrates how investment tax credits, production tax credits, stimulus money, loan programs, and feed-in tariffs have made a major difference (Hardcastle, 2016). Similar support structures would advance the accelerate the deployment of carbon technologies.

Government investments could quickly and cost-effectively develop NETs (NAS, 2019). CCS would also benefit from long-term support like that which has been given to other low-carbon technologies in recent years (Carbon Capture and Storage Association, n.d.). Governments can support CRT by incentivizing the reduction of CO2 emissions (2016, Lux Research). CRT would also benefit from direct government incentives that drive innovation. Incentivizing innovation in CRT could contribute to technological breakthroughs that meaningfully contribute to the drawdown of CO2 (NAS, 2019). This is a view shared by Ernest Moniz, the former U.S. energy secretary (Bipartisan Policy Center, 2019).

Government support for carbon technologies would spur rapid growth just as they did in the nuclear and electric battery industries. Perhaps the best illustration of this point is the renewable portfolio standards that helped renewable energy go from a niche to an energy staple in less than a decade (Welch, 2019). Similar initiatives would do the same for CRT.

CRT would benefit from strong regulatory and planning frameworks (Realmonte et al, 2019). Carbon pricing may be the single most important policy lever particularly if the carbon price is sufficiently high (Carbon Tracker, 2018). Legislation that increases the cost of carbon would make all the difference according to Holly Jean Buck, a postdoctoral research fellow at UCLA’s Institute of the Environment and Sustainability. She explains that market mechanisms are not enough to scale CRT (Jones, 2020). Even oil companies say carbon pricing would make carbon capture economical (Budinis et al, 2016). Many NCS initiatives would also benefit from putting a price on carbon. This could even help to motivate landowners to change their behavior.

Policies that give businesses the incentive to research, develop, and deploy the required technologies would also benefit CRT. There is a tremendous economic opportunity associated with CRT and the right government signals would unleash considerable contributions from the private sector. The economic argument is supported by powerful fiscal logic supporting CRT. As explained in MIT Technology Review, the cost of limiting climate change could double without carbon capture technology (Bullis, 2014).

As explained by Doug Vine, an energy policy analyst and a senior energy fellow at the Center for Climate and Energy Solutions, establishing the economic value of CRT is key to deployment (Gertz, 2016). Communicating the fact that there are massive financial rewards that await companies that can develop scalable carbon technologies would be a game changer. The global CCS market is projected to reach 8.05 billion USD by 2021, representing a CAGR of 13.6% from 2016 to 2021 (Carbon Capture and Sequestration Market. n.d.). According to some estimates, CCU alone represents a USD 1 trillion market opportunity by 2030 (Roberts, 2019). The wider field of climate-smart growth could be worth 26 trillion USD by 2030 (UNFCCC, 2020). There are also numerous co-benefits associated with reducing greenhouse gas emissions including those that improve health. The health co-benefits of reducing GHG emissions could be worth $100 US per tonne of CO2 in high-income countries like the U.S. and Canada, (Hamilton, Brahmbhatt, & Liu, 2017). This alone would cancel out the costs of carbon technologies and offer a net economic gain

Investors see the opportunity and they are looking to invest in CRT-focused startups. In 2018 Silicon Valley’s largest startup accelerator, Y Combinator, put out a request for startups working on DAC. They plan to build the most massive infrastructure projects in human history. This represents unprecedented investor interest. “The first countries and companies to develop scalable, cost-effective carbon-removal technology will benefit as demand for that intellectual property rises,” said Kate Gordon, a fellow at Columbia’s Center on Global Energy Policy. “This is where markets are going. This is the new set of technologies that people are starting to pay attention to, ” (Varinski, 2018).

Several companies are already investing in carbon capture. Occidental Petroleum Corp is building the largest DAC facility. In 2017 De Beers launched a pilot carbon capture project, Archer Daniels Midland (ADM) has launched its second industrial carbon capture and storage plant (EESI, 2017), and an Indian chemical plant is turning its emissions into baking soda (Dockrill, 2017) and Coca-Cola is making sparkling water from captured carbon (Kotecki, 2019). However, Microsoft is setting the bar for carbon capture by announcing that by 2050 it will remove all the carbon it has ever emitted either directly or by electrical consumption (Domonoske, 2020).

The U.S. Department of Energy (DOE) has funded research and development of CCS since 1997 within its Fossil Energy Research and Development (FER&D) portfolio. Since FY2010, Congress has provided more than $5 billion total in appropriations for CCS-related activities. Third Way policy advisor Erin Burns said she’s seeing more congressional support for funding research and development of carbon technologies than there is for other climate-change solutions (Varinski, 2018). The concept of CCU has gained interest within Congress and in the private sector as a means of reducing atmospheric carbon and offsetting costs. There is also support for CRT legislation in the U.S. Senate (Welch, 2019).

Carbon technologies are getting Congressional support in the form of the FUTURE Act (the Furthering carbon capture, Utilization, Technology, Underground Storage, and Reduced Emissions Act). The 2018 U.S. federal budget contains a bipartisan law that provides an unlimited tax credit of $35 – $50 for each metric ton of emissions captured and stored by a power plant or chemical factory (Rathi, 2018). This more than doubles the tax credits for capturing and permanently storing carbon dioxide in geological formations. Although it is primarily geared toward EOR, it can also be used by companies that convert carbon to other products such as cement, chemicals, plastics, and fuels (Cho, 2018).

In FY2018, Congress increased funding for DOE FER&D by nearly $59 million representing a 9% increase compared to FY2017. Both the House and the Senate-passed appropriations bills for FY2019 that would match or increase the appropriated amount compared to what Congress enacted for FY2018 ($727 million). The expanded Section 45Q of the Internal Revenue Code tax credits for CCS and EOR production that were enacted as part of P.L. 115-123 are a significant step toward incentivizing more development of large-scale CCS deployment (Folger, 2018).

Section 45Q increased the amount of the tax credit from $20 to $50 per ton of CO2 for permanent sequestration and increased it from $10 to $35 for EOR purposes. This effectively removed the 75-million-ton cap on the total amount of CO2 injected underground. The 45Q tax credits for carbon sequestration in EOR alone could stimulate storage or utilization totaling 50–100 Mt of CO2 per year (Bipartisan Policy Center, 2019). This provision will lead to more widespread adoption of the technology and it has been described by its supporters as a “game changer” for CCS (Folger, 2018). As of March 2020, the Senate bill is out of committee, but it awaits floor action and so far, none of the five subcommittees with jurisdiction in the House have considered the measure (Kramer, 2020).

States are also providing key leadership in support of carbon technology companies. Due to support from the state of California, some carbon technology firms are expecting to turn a profit. A wide range of California state regulations have contributed to this outcome. This includes California’s regulation of transport and the California Air Resources Board (CARB), which requires the state to cut its emissions by 80% by 2050 compared to 1990 levels. The low-carbon fuel standard (LCFS) is a cap-and-trade program, where CARB sets a cap on the total emissions from the transport sector and brokers trade in the form of credits for metric tons of carbon dioxide lowered using a low-carbon alternative. California also passed an even more stringent law that mandates net-zero emissions by 2050. By going from an 80% reduction to a 100% reduction, carbon dioxide removal (CDR) technologies like DAC have become a central part of California’s emissions reduction strategy. The LCFS was also modified to include DAC.

The real issue preventing the deployment of CRT is the absence of public and political will. So, alongside efforts to advance the technology and reduce costs, we will need to find ways to increase public support and grow political will. One of the ways we can do this is by leveraging our burgeoning understanding of social tipping points (STP) and social tipping interventions (STI).

Researchers (Otto, 2020) have identified social tipping elements and concrete interventions that activate contagious processes. Applying this understanding of STP can help garner public support for climate action including CRT. STP is about far more than enhancing awareness this is about rapidly changing social norms and enabling us to implement the required carbon technologies before the window of opportunity closes. The idea is to accelerate a fundamental shift in behavior. This is about creating a new social equilibrium in which climate action is recognized as the social norm (Potsdam Institute, 2020).

The key is exponential spread that improves the prospects for carbon technologies and the policy actions that would benefit CRT. This is about political changes that lead to climate-friendly legislation and lifestyle transformation that includes a reorientation of individual consumer decisions. STIs can activate a contagious process that rapidly spreads values, norms, behaviors, and technologies (Otto, 2020).

Research indicates that moving away from fossil fuels may be the first step in what has been described as a positive avalanche effect (Potsdam Institute, 2020). Although much of their focus is on GHG neutral technologies this could be adapted to focus on NETs. The hope is that this will expedite the opening of political pathways for decarbonization.

For references go to CRT Resources. See also Glossary of Terminology Related to CRT

*CRT is being used here to refer to both approaches that remove CO2 from the ambient air and from the source where it is emitted.

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