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Carbon Removal’s $100 Billion Conundrum

That’s how much the U.S. should be spending per year by 2050 to achieve net zero, according to a new Rhodium Group report.

Carbon removal.
Heatmap Illustration/Getty Images

Money seems to be pouring into the field of carbon removal from every direction. Every other week there’s an announcement about a new project. Multimillion dollar carbon removal procurement deals are on the rise. The Department of Energy is rolling out grants as part of its $3.5 billion “direct air capture” hubs program and also funding research and development. Some carbon removal companies can even start claiming a $130 tax credit for every ton of CO2 they suck up and store underground.

The federal government alone spends just under $1 billion per year on carbon removal research, development, and deployment. According to a new report from the Rhodium Group, however, the U.S. is going to have to spend a lot more — roughly $100 billion per year by 2050 — if carbon dioxide removal, or CDR, is ever going to become a viable climate solution.

“The current level of policy support is nowhere near what's needed for CDR to play the role that people say it needs to play in solving climate change,” Jonathan Larsen, one of the authors, told me. “We wanted to reset the policy conversation with that in mind.”

Carbon removal is what’s implied by the “net” in net-zero — a way to compensate for whatever polluting activities are going to take longer to replace with clean solutions. It will be impossible to achieve net-zero emissions by 2050, either at the national or global level, without removing carbon from the atmosphere. But how much carbon removal will we need, and how do we make sure we’re ready to deploy it?

These questions are, in a sense, unique to the field. When we talk about cutting carbon emissions from buildings or transportation, experts are relatively confident in the set of solutions and the scale of the task — they know how many buildings and cars there are and can make reasonable estimates of growth rates.

But carbon removal is a moving target. We know how much we’re removing today — roughly 5 million metric tons, mostly from nature-based solutions like planting trees. Based on current policies, Rhodium estimates we could scale that up to about 50 million metric tons by 2035. But figuring out how much we need depends entirely on how successful we are at decarbonizing everything else. Even if we know we need to electrify all our cars, for example, no one can say whether that will happen by 2050, or at least not with any meaningful degree of certainty.

The Rhodium Group report attempts to narrow the range of this uncertainty so that policymakers can better attack the problem. The authors looked at a handful of different decarbonization roadmaps for the U.S. and found that the minimum amount of carbon removal needed to compensate for residual emissions in 2050 is 1 gigaton, which is the same as one billion metric tons, or a 20x increase from where current policies will get us. It's also equal to about 20% of the carbon that the U.S. emitted last year. “There's a very likely scenario where we need a lot more than that,” said Larsen. “There's scenarios where we need less. But most of the studies out there say at least a gigaton.”

Even if it’s only a rough estimate, landing on a number is useful, he told me. Rhodium Group spends a lot of time answering questions about, for example, what some new policy means for achieving Biden’s goal of cutting emissions in half by 2030. “I don't know if we’d get those questions if there wasn't a 50% target to shoot for,” he said. “So I think this way, people can be like, what does this next wave of policy support for CDR do for getting the U.S. on track for a gigaton?”

The level of investment it will take to get there is also highly uncertain. The authors did a quick back-of-the-envelope calculation to land on $100 billion by 2050: We need to be removing a minimum of one billion tons by then, and the Department of Energy has a goal to bring the cost of carbon removal down to $100 per ton.

The meat of the new report focuses on how to bridge the gap between the roughly $1 billion we spend today and $100 billion, which starts, according to the authors, with treating carbon removal as a public service. It’s not like other climate solutions such as wind turbines or heat pumps, they write, which can rely on private markets to provide predictable demand or to stimulate innovation. “There are very few pathways one can envision where the private sector is going to both scale and deliver those tons,” Larsen told me. Voluntary carbon removal purchases by companies could play a role, he said, but it will not be big enough to get to a gigaton.

Rhodium recommends expanding and extending many of the federal policy programs that already exist — by, for example, providing more R&D funding, doing more government procurement, handing out more loan guarantees, and creating more “hubs” centered on other approaches besides direct air capture, like enhanced weathering or biomass burial. Right now, the tax credit for capturing carbon from the air and burying it underground can only be claimed for 12 years, and projects have to start construction by 2032. The authors call for extending the claim period and moving up the construction start deadline. They also recommend expanding the program to apply to a wider range of carbon removal methods.

A common criticism of government support for carbon removal is that policy makers will over-rely on it. If we aim to do 1 gigaton of carbon removal, does that mean we won’t cut emissions as much as we could have? What happens if, for whatever reason, we can’t achieve the 1 gigaton?

Larsen disagreed with that framing. For one, it’s easy to turn it around: If we don’t scale up the capacity to remove carbon, and we also don’t eliminate emissions by mid-century, we’re not even going to have the option to halt climate change at that point.

But also, decarbonization shouldn’t stop in 2050, he said. If we can achieve that 1 gigaton of annual removal and then keep cutting emissions from remaining sources, we could eventually get to net-negative emissions — even without more CDR. In other words, if we reach a point where we’re removing more than we’re emitting, we could start to reverse global warming, not just stop it.

“I know that's, like, sci-fi,” he told me. “But that's ultimately where we as a species have to go and that’s why setting a target here of at least a gigaton, to me, does not take away the need to reduce elsewhere.”

Emily Pontecorvo profile image

Emily Pontecorvo

Emily is a founding staff writer at Heatmap. Previously she was a staff writer at the nonprofit climate journalism outlet Grist, where she covered all aspects of decarbonization, from clean energy to electrified buildings to carbon dioxide removal.


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The nascent carbon removal industry is desperate for customers. At a conference held in New York City last week called Carbon Unbound, startup CEOs brainstormed how to convince more companies to buy carbon removal as part of their sustainability strategies. On the sidelines, attendees lamented to me that there were hardly even any potential buyers at the conference — what a missed opportunity.

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Tom Steyer and Warren Buffett.
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