The Climeworks factory with its fans in front of the collector and the CO2 being released through the ventilators at the back is seen at the Hellisheidi power plant near Reykjavik on October 11, 2021.
The images are courtesy of Halldor Kloss.
The idea of sucking carbon dioxide out of the atmosphere was a staple of science fiction. It's been an exciting fantasy for believers that human ingenuity and technology will save the planet. It has been a distraction from the work of cutting emissions. Climate activists fear that focusing on carbon removal might lull us into a false sense of security as we careens a fossil-fuel-powered locomotive off a cliff. The fact that fossil fuel companies have become advocates for developing carbon removal technologies has added to their distrust.
The issue of climate change has become so important that in 2021, there was a growing movement in support of removing gobs of carbon from the atmosphere as a life-preserver for the planet. Proponents of carbon removal see it as a complement to dramatically cutting emissions.
Climate scientists have supported carbon removal efforts over the last year. A report released by the United Nations' Intergovernmental Panel on Climate Change made clear that carbon removal is an important part of a comprehensive strategy to combat climate change. Reducing emissions may not be enough to fix the climate, and carbon removal may be needed to meet global climate goals, according to a recent study by the National Academies of Sciences, Engineering and Medicine.
Entrepreneurs and startups are trying to develop carbon removal technologies. In early 2021, Musk announced that he was awarding a $100 million prize to anyone who could demonstrate a solution that could pull carbon dioxide directly from the atmosphere or oceans. Carbon-removal startups are getting a lot of money from companies. Some people are showing progress. The world's largest "direct air capture and storage" plant, called Orca, was opened in September by a startup called Climeworks.
Governments are taking carbon removal very seriously. The European Union is working on a plan to remove five million tonnes of carbon dioxide from the air by the year 2030. In November, the U.S. Department of Energy announced a new initiative called Earthshot. President Biden signed into law an infrastructure bill that contained more than $12 billion for carbon removal, including $3.5 billion to build four machines that will suck carbon out of the air with gigantic fans and then dispose of it with chemicals.
The technology to remove and dispose of carbon at the scale needed to make a real dent in climate change is still years away. Susan Athey, Rachel Glennerster, and Christopher Snyder argue that we need more than just government grants in order to reignite the electric engine of innovation. They say we need the power of markets. There is no real market for carbon removal.
A team of economists argue that we should create a market for innovation and carbon removal technologies. Artificial markets have changed the world before, and it may sound like another pipe dream, but leaders have created them.
There is no market where there is none.
The recent success in building a market for pneumococcal vaccines in low-income countries is one of the reasons why the case for an artificial market for carbon removal is being built. Around 1.1 million people died from pneumococcal disease in the early 2000s, most of them kids under five years old.
The financial rewards were too small and uncertain for pharmaceutical companies to sink millions of dollars into R&D for a vaccine to save lives. There was no market for a pneumococcal vaccine in the developing world.
In 2007, five countries, including Canada, Italy, Norway, Russia, and the United Kingdom, agreed to try and change this. They donated over a billion dollars to create an "Advance Market Commitment" that would buy vaccines from pharmaceutical companies at a set price. They created a market where there wasn't one.
It worked. The Advance Market Commitment convinced one pharmaceutical company to create a vaccine and three more to do it. More than 150 million kids have been immunized against pneumococcal disease, saving an estimated 700,000 lives.
They want governments and NGOs to create an advance market commitment for carbon removal. "If you look at the numbers, you'll realize we've got to figure this out," says Athey, a technology-focused economist. We have to do it. Reducing emissions won't work according to most models.
Athey envisions a world where governments or NGOs set a price on carbon removal, in addition to drastically cutting emissions and funding basic climate R&D through traditional government grants. They commit billions of dollars to the cause, specifying how much they are willing to pay to private companies for a given amount of carbon removed from the atmosphere.
She thinks funders set different prices for carbon removal. The price could be set high at first since many startup need all the help they can get at the prototyping stage. She says funders could commit to buying more carbon removal at lower prices. In this way, innovators can get some guarantees that once they get costs down and are able to scale up, there will be buyers waiting. Entrepreneurs experimenting with carbon-removal technologies would benefit from a system like this.
Athey says that the planet depends on the problem being solved. If you have an idea that could be very important if it succeeds, but has a low chance of success, you can't get a loan from the bank.
An Advance Market Commitment creates a real market with all of the benefits that come with it. She says that winning a prize is not a business model. It would allow companies to get private financing from banks and investors, allowing them to fund teams of engineers and new machines, if an Advance Market Commitment were to be put in place. The best technologies and methods would rise to prominence as these companies competed.
The companies and foundations that are funding carbon removal could create a prototype of their own. They could commit to paying for units of carbon removal and prove the viability of the AMC approach to carbon-removal technologies. She says that it would be something that governments could start to lean into.
"It's hard not to get depressed and fatalistic when it comes to the failure of humanity to confront climate change," Athey says. One way to help avoid that is to break the problem down into smaller pieces and figure out what can be done.
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