 "Scrubbing carbon from atmosphere could be the next climate gold rush")
This summer, Bill Gates huddled in London with representatives of some of the world’s wealthiest people, including the Amazon founder, Jeff Bezos, SoftBank founder, Masayoshi Son, and Prince al-Waleed bin Talal of Saudi Arabia.
They were evaluating their joint investments in firms that could help the world combat climate change. Among the businesses in their portfolio, four stood out : They were working to strip carbon dioxide from the atmosphere, for a profit.
The technology, which did not exist until a few years ago, is still unproven at scale. Yet, it has a uniquely alluring appeal. Stripping away some of the carbon dioxide that is heating up the world makes intuitive sense. And with a small but growing number of firms willing to pay for it, investors are jockeying to be first movers in what they believe will inevitably be a big industry that is necessary to help fight global warming. Carbon dioxide removal is the most developed form of what is known as geoengineering, a broad set of speculative technologies designed to manipulate natural systems in order to cool the planet. In the past several years, as climate change has worsened, such ideas have moved from the stuff of science fiction into the mainstream.
Companies working on ways to pull carbon dioxide from the air have raised over $5 billion since 2018, according to Jefferies. “It’s the single greatest opportunity I’ve seen in 20 years of doing venture capital,” said Damien Steel, Chief Executive of Deep Sky, which has raised over $50 million to develop carbon dioxide removal projects. “The tailwinds behind the industry are greater than most I’ve ever looked at.”
Critics argue that carbon dioxide removal is a dangerous distraction that will perpetuate the behavior that is causing the climate crisis.
“Carbon capture will increase fossil fuel production, there’s no doubt about it,” said Mark Z Jacobson, a professor of civil and environmental engineering at Stanford University. “It does not help climate one bit.”
But for now, neither investors nor customers are shying away.
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The group assembled by Gates, known as Breakthrough Energy Ventures, is among the biggest backers of over 800 carbon removal firms that have been started in recent years. Others include Silicon Valley venture capitalists, private equity firms from Wall Street and major corporations like United Airlines.
This year, Microsoft, Google, and British Airways were among the companies that committed a total of $1.6 billion to purchase removal credits. That figure was up from less than $1 million in 2019, according to CDR.fyi, a website that tracks the carbon dioxide removal industry.
A group of companies including Stripe, H&M, JP Morgan and Meta have banded together to make over $1 billion in purchase commitments for carbon dioxide removal. Airbus, Equinor and Boeing have pledged to pay for the service, too.
Next year, industry executives believe firms could spend up to $10 billion on such purchases. In a recent report, McKinsey estimated the market could be worth as much as $1.2 trillion by 2050.
While huge sums of money are being dedicated to the nascent field, these projects will not have a effect on global temperatures anytime soon.
There are a few dozen facilities operational today, including ones in Iceland and California. But the biggest of these capture only a sliver of the greenhouse gases produced in a day. Even if hundreds more such plants were built, they would not come close to counteracting even 1 per cent of annual carbon dioxide emissions.
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- Investors include Bill Gates’ Breakthrough Energy Ventures, Silicon Valley venture capitalists, private equity firms, and major corporations
- $1.2 trn estimated CDR market size by 2050
- $5 bn raised since 2018
- $1.6 bn spent on CDR credits in 2023 by Microsoft, Google, and British Airways
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