The United States Urgently Needs a Carbon Management Vision

In April, the world received disconcerting, if unsurprising, news: humanity is doing too little to arrest the causes of climate change. But the Intergovernmental Panel on Climate Change (IPCC), the authoritative global scientific body that published these findings, also offered a surprise: emerging technologies that capture carbon offer a glimmer of hope for achieving climate goals that cannot be achieved by relying just on today’s technologies. If these new technologies are developed and deployed to their full potential alongside existing low-carbon resources, global greenhouse gas emissions can be reduced while the world economy continues to grow and living standards improve.

What’s needed now is global action to bring these technologies to maturity. This is a mission that the United States can and should lead.

According to the IPCC report, if humans don’t quickly reduce total greenhouse gas emissions, increasingly costly and destructive climatic events are more likely. The desertification of the American Southwest, devastating forest fires, and heat bombs like those experienced by the Pacific Northwest last summer are a taste of things to come. The IPCC sets forth several pathways to avert such disasters. Notably, it is the first such report to seriously consider carbon removal technologies, particularly carbon capture and storage (CCS) and direct air capture (DAC). It says that to keep global temperature increases to just two degrees Celsius by 2100, DAC facilities will need to remove as much as 250 billion tons (gigatons) of carbon dioxide (CO₂) from the atmosphere, a tall order by any estimate. CCS, which keeps CO₂from being emitted in the first place, will also play a key role in keeping climate goals within reach.

The need for active carbon management becomes even clearer when the impossibility of fully eliminating fossil fuels from the global economy while maintaining global economic growth is considered. There are fossil fuel resources –– think coal and steel plants in China and India or relatively new natural gas plants in the United States–– that will be around in 2050. Rather than shut down and “strand” these valuable assets, retrofitting and capturing their harmful emissions at the smokestack must become the technological and economically viable choice.

In a recently published report, ITIF looks at the need to accelerate innovation in CCS and DAC, which we term “active carbon management.” Our report finds that the United States needs to invest in these technologies now to have them ready to scale by 2030 and beyond.

The figure above details the different technologies available to manage and remove carbon. Under natural carbon management technologies are biological and chemical methods of removing and sequestering carbon, including afforestation, ocean carbon removal, and geological weathering. While some of these processes are well developed, others are still in their infancy. Additionally, many natural carbon management solutions, such as afforestation, are vulnerable to climatic events like wildfires that re-release the captured carbon. Long-term carbon removal certainty is critical to any carbon management technology.

In the overlap regions, there are hybrid active/natural carbon management techniques worthy of further exploration. Bioenergy with carbon capture and storage (BECCS), for instance, uses the natural process of capturing carbon by growing fuel crops and then captures emissions when the fuel is consumed to generate electricity and heat. Hybrid carbon management techniques share both the strengths and weaknesses of natural carbon management techniques, notably relatively low energy requirements to capture ambient CO₂, along with extensive land-use and resource requirements and vulnerability to risks such as wildfire and drought.

Finally, underactive carbon management technologies on the right, there are technologies that ITIF believes will play the largest role in removing and managing carbon. These include DAC and CCS and detail the long-term sequestration pathways and viable industrial product inputs for captured carbon. Active carbon management technologies are based on well-developed technologies and have the potential to remove and permanently store billions of tons of carbon.

The United States Can Lead

The United States can lead a global carbon management transition that would radically reduce the cost of DAC and CCS if it grows domestic markets, leverages existing energy expertise, and supports emerging industries and technologies with regulatory and financial assistance. After the passage of the Infrastructure Investment and Jobs Act (IIJA), the federal government is gearing up to invest as much as $12.5 billion in active carbon management technologies.

With innovative program designs, such as DAC and CCS hubs for diverse industrial sectors and cash prizes for carbon capture start-ups, alongside funding for expedited permitting and regulatory changes to facilitate siting of necessary CO₂ infrastructure, the IIJA will jumpstart a domestic carbon management industry. The DOE’s Office of Fossil Energy and Carbon Management released a 75-page strategic vision report, laying out key priorities to achieve decarbonization while addressing environmental justice, technology innovation, and deployment hurdles.

More must be done, however. Leveraging public dollars to attract private sector monies should be the goal of all government industrial policies. The private sector has begun to respond to the new policies, with an estimated 100 carbon capture projects announced in 2021, capable of capturing 100 million tons of emissions. Globally, the carbon removal industry is expected to scale into a billion-ton industry valued in the trillions of dollars by mid-century.

ITIF’s report provides a list of detailed recommendations to achieve these goals. First, Congress should increase tax incentives for carbon captured from industrial and power plants and direct air capture to at least $85 per ton for CCS and $180 per ton for DAC. Generous incentives need not be in place forever, but they are critical to lowering risk, providing equity, and drawing in established firms and upstart innovators. In the absence of a carbon price, incentives are the only way to make such investments viable. In the long run, government revenue will be necessary to sustain them. Just as the government is responsible for picking up trash, it will need to fund some level of ongoing carbon removal.

Second, as the IPCC report notes, a lack of robust public support is a key barrier to the wider deployment of DAC and CCS. The carbon removal community must work to rebut misleading claims that some in the environmental community, who oppose all types of fossil fuel use, have made over the years. While building community support and addressing environmental justice concerns is vital, a wholesale rejection of active carbon management technologies undermines global climate efforts. Some environmental groups oppose investing in active carbon management because they see it prolonging fossil fuel dependence. However, as noted in ITIF’s report, fossil fuels are likely to be a valuable energy resource through 2050 and beyond. Focusing on the fuels rather than the emissions ignores where true attention should be applied: eliminating emissions from the global economy.

Third, active carbon management requires creative regulatory assistance in the siting, permitting, and monitoring of the facilities and the necessary infrastructure, such as CO₂ pipelines and storage. In the United States, the Department of Interior’s Bureau of Ocean Energy Management should speed up the guidance process for the siting and permitting of offshore CO₂ storage. The Environmental Protection Agency needs more money to support the expeditious review of CO₂ well permits. The Pipeline and Hazardous Material Safety Administration is woefully underfunded to effectively oversee a dramatic expansion in CO₂ pipelines and monitoring.

The science of climate change has been clear for decades. The IPCC shows that it is increasingly clear that active carbon management technologies must be in the climate mitigation toolbox. With its wealth of know-how and innovative start-up economy, the United States is well-positioned to dominate this burgeoning global industry and will do so if the federal government has the vision to realize this potential.

Check out ITIF’s report on Active Carbon Management alongside the May 3^rd webinar featuring Representative Paul Tonko (NY) and Dr. Jennifer Wilcox of DOE’s Office of Fossil Energy and Carbon Management.