Earlier this morning, Brad Plumer of the NY Times tweeted:
Turns out, our team @carbonremoval has been kicking around a more modest (and not necessarily deficit-financed) idea like this to support carbon removal technology development and early deployment. Here’s how it might work:
What: a carbon removal purchasing vehicle that provides a guaranteed, credit-worthy buyer for a portfolio of projects.
Why: Carbon removal projects often struggle to find customers, and this purchasing vehicle would serve as a guaranteed demand source. It would enable early project deployments, which is critical for learning how to do projects more efficiently and cost-effectively.
How: The initial purchasing vehicle would provide on the order of $100Ms to spend on a range of early-of-a-kind carbon removal projects. Like a feed-in tariff in the electricity sector, the fund would only pay for carbon removal that is delivered, leaving the cost of technology/project development to the private sector. Over time, subsequent funds of greater magnitude could be raised to deliver larger carbon removal outcomes, all at lower unit cost due to learning from previous projects.
Through competitive project sourcing across a range of carbon removal pathways (i.e. direct air capture and storage, bioenergy + carbon capture and storage, soil carbon sequestration, etc.), the fund would ensure that it is buying the most cost-effective projects available within each category. Categories and funding allocation would be determined in advance by an investment committee of technology experts and investors/grantmakers. This approach would balance current solution cost with promise to actually get to scale to avoid premature technology lock-in, while also avoiding investments into low-cost but niche technologies that won't scale.
To ensure integrity across solution options, every project would be subject to a lifecycle carbon assessment to ensure that carbon accounting is apples-to-apples across approaches (and to create a robust lifecycle carbon assessment that can be exported to other voluntary and regulatory carbon removal efforts in the future). Every project would also be subject to environmental impact and community impact assessment in order to avoid any negative unintended consequences from early projects.
This structure is distinct from a traditional carbon offset because the amount of carbon removal generated will not be known ex ante. Instead, the amount of carbon removal ultimately delivered (and thus the $/ton price of carbon removal) will be determined by competitive bidding for each of the solution subcategories -- in essence a reverse auction to get the most economical projects for a set amount of up-front revenue.
This type of fund would also be complementary to broader decarbonization policy, and it would avoid competition with measures to reduce emissions.
The fund could also be capitalized from a range of sources -- governments are the most natural home for such a large scale effort, but companies and even individuals could contribute as well on a voluntary basis.
Lastly, this wouldn’t be complete without a hat tip to CMU researcher Costa Samaras for his “Green-BECCS” idea sparked from this thread: