President Reagan gave a televised address in March 1983 that proposed a space-based program that could shoot down nuclear missiles fired at the United States, otherwise known as “Star Wars.” While it was a pipe dream, the increased U.S. military spending did force the Soviet Union also to squander scarce resources. Finally, the two sides reconciled, and the Cold War ceased.
Now the Biden Administration is reaching for the stars. The U.S. Department of Energy will invest $3.5 billion to build four “direct air capture” facilities that can remove CO2 from the atmosphere. Once captured, the challenge is sequestering or using it to make industrial materials like cement or steel. It’s an embryonic and expensive technology.
Unlike Star Wars, companies are demonstrating the technology on a small scale. They need to ratchet that up if it is to make a difference. For example, Swiss-based Climeworks has Iceland’s largest direct air capture project globally. The company says the project will capture and store 36,000 metric tons annually of CO2. Microsoft Corp. and Shopify want to use their services.
It’s a start. But the amount of carbon removal is negligible relative to the annual global emissions: 36.3 billion metric tons, according to the International Energy Agency. Climeworks’ ultimate goal is to remove 10 billion tons of CO2 yearly by 2050.
It is estimated to cost $600 to remove a ton of CO2. But Climeworks says it will get that down to $100 a ton.
Direct air capture is a laudable goal. But it is prohibitively high priced, prompting the obvious questions: should governments and investors target their monies to proven technologies, cleaner fuels and natural solutions such as rainforest preservation? Or, are such expenditures necessary because fossil fuels will remain staples of the global economy?
“In the world of carbon reduction, we are all collaborators trying to solve a problem. We all need to succeed because the problem is so huge,” says Martin Keighley, chief executive of San Antonio-based carbon capture company CarbonFree, in an interview. “Government funding gets things going. Investing in direct air capture will accelerate carbon financing, benefiting everyone who captures or retains CO2, including rainforest nations.”
Governments Get Things Going
To be clear, carbon capture ensnares the CO2 at the smokestack while direct air capture snags it in the atmosphere.
With that, energy secretary Jennifer Granholm said the agency will invest $1.2 billion in two demonstration projects in Louisiana and Texas that will remove 2 million metric tons of CO2 annually from the atmosphere. Climeworks and California-based Heirloom have partnered to win a grant—“a testament to Climeworks’ proven ability to deliver high-quality, high-integrity carbon removal,” says Daniel Nathan, chief development officer.
Meanwhile, Occidental Petroleum is buying Carbon Engineering for $1.1 billion to help it develop carbon capture technology. The company may bury the CO2 or use it to make such products as cement or aviation fuel. Reuters reports it wants to build at least 100 plants using direct air capture. The oil giant is also getting an Energy Department grant to develop a similar project in Texas.
But what about natural solutions like rainforests? They are already vacuuming CO2 from the atmosphere, but no assembly is required. The rainforest countries need carbon finance—to ensure their trees are worth more alive than dead or used for farming or timbering. Consider that the global community gets an enormous benefit: between 2005 and today, rainforest nations have prevented 9 gigatonnes of CO2 from being emitted. (One gigatonne is 1 billion metric tons.)
As the editor-at-large for the Coalition for Rainforest Nations, which represents 65 of these countries, I research and write about ways they can pursue and finance their commitments under the Paris accords.
Carbon finance comes in a few forms ranging from making direct contributions like Norway has done to selling carbon credits to establishing a loss-and-damage fund to help developing countries guard against the effects of climate change. Rainforest nations need at least $100 billion to save their trees.
Indeed, Ryazan Al Mubarak, the United Arab Emirates UN climate change champion for COP28, told me that one of her central drives is rainforest preservation in Africa, Latin America, Asia and the Pacific. Such a strategy is here-and-now and the least expensive climate combatant.
“We need engineered and natural solutions,” adds CarbonFree’s Keighley. “Government funding is a primer, creating a multiplier effect. But markets will add value to whatever asset reduces or retains CO2—direct air capture, carbon capture, or rainforests.”
Star Wars was wishful thinking, but direct air capture is closer to reality—producing benefits and enlisting brand-name companies. Still, it’s a nascent technology that will take time to scale, underscoring the value of the rainforests that need carbon finance to continue generating dividends.