Catch and (Don’t) Release: Most Carbon Dioxide Removal Is Costly but Unavoidable
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Catch and (Don’t) Release: Most Carbon Dioxide Removal Is Costly but Unavoidable

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CEO Insight Minute: Is Carbon Removal the Only Way to Meet Climate Goals?

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CEO Insight Minute: Is Carbon Removal the Only Way to Meet Climate Goals?

Our research suggests it would be more cost effective to reduce emissions first before the expensive step of removing carbon dioxide directly from the air.

Projections by the Intergovernmental Panel on Climate Change and the International Energy Agency assume that carbon dioxide removal will be critical in meeting the Paris Agreement’s target of keeping global average temperature increases to significantly under 2 degrees centigrade above preindustrial levels. But most carbon dioxide removal projects are still expensive, don’t operate at scale, and might require significant government subsidies to be economically viable.

Trusted Insights for What’s Ahead™


[1] Akshat Rathi, Natasha White, and Demetrios Pogkas, Junk Carbon Offsets Are What Make These Big Companies ‘Carbon Neutral’, Bloomberg, November 21, 2022.

Projections by the Intergovernmental Panel on Climate Change and the International Energy Agency assume that carbon dioxide removal will be critical in meeting the Paris Agreement’s target of keeping global average temperature increases to significantly under 2 degrees centigrade above preindustrial levels. But most carbon dioxide removal projects are still expensive, don’t operate at scale, and might require significant government subsidies to be economically viable.

Trusted Insights for What’s Ahead™

  • Companies will have to increase investments in carbon dioxide removal and carbon capture and sequestration to meet their announced carbon reduction pledges. The practice of purchasing carbon offsets may not result in meaningful permanent carbon emission reductions.[1]
  • While directly reducing GHG emissions is preferable, many companies will need to supplement these efforts with higher-cost carbon dioxide removal options. In fact, achieving net zero by 2050 is nearly impossible without significant adoption of carbon dioxide removal in parallel with broad emissions reductions.
  • Direct air capture of carbon dioxide from the atmosphere will remain an early-stage technology that won’t be scaled soon at the rate necessary for businesses to significantly reduce emissions. Moreover, direct air carbon capture requires significant amounts of renewable energy to pump and process large volumes of air to guarantee true emission or carbon concentration reductions.
  • Businesses that are actively pursuing carbon dioxide removal and sequestration will have to consider the capture and storage locations, the risk of leakage, and the potential need to construct a carbon dioxide pipeline infrastructure. Project siting, permitting, and operational complications will likely result in costly delays.

[1] Akshat Rathi, Natasha White, and Demetrios Pogkas, Junk Carbon Offsets Are What Make These Big Companies ‘Carbon Neutral’, Bloomberg, November 21, 2022.
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Author

Alexander Heil, PhD

Alexander Heil, PhD Alexander Heil, PhD

Senior Economist, ESF Center
The Conference Board

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