Oct. 7, 2022: Here is a snip of this interesting article explaining the importance of carbon prices above $100 per metric ton of carbon dioxide equivalent — when it comes to incentivising the removal of greenhouse gases from the atmosphere using various technology.
CarrZee: This is partly why the world quickly needs globalish/G20 carbon prices of more than $100/ton. Simply put, polluters should pay. Taxpayers should get the money.
Any country installing carbon prices at around this level will probably see a surge of investment from those looking to make money from the climate transition — that is global investors / banks / pension funds / private equity / sovereign funds. This depends on quality of government oversight.
Click this link or see unedited excerpt below:
Why $100 per ton is the carbon removal industry’s holy grail
It’s the point at which carbon removal services become affordable at the scale needed to make it a meaningful tool to reach net zero emissions.
For carbon dioxide removal to be useful in reaching net zero, prices will have to come down.
Photo: Arnaldur Halldorsson/Bloomberg via Getty Images
October 4, 2022
Carbon dioxide removal service buyers and sellers are focused on one metric: $100 per ton. It’s one of Frontier’s stated criteria that the fund uses to evaluate its advance purchases. In a survey of the long-duration carbon removal community, CarbonPlan found that stakeholders are focused on the $100 benchmark. The Department of Energy even announced that it would be investing in carbon removal research to bring the cost of the technology down to $100 per ton.
Where did that number come from? In short, it’s the cost per ton of removal services that it would take for the CDR industry to reach commercial viability. It’s based on a handful of factors.
- It’s the point at which carbon removal becomes affordable at the scale needed to make it a meaningful tool to reach net zero (and, eventually, negative emissions), Shuchi Talati, a senior visiting scholar at Carbon180, told Protocol.
- It evolved from modeling and policy conversations, and is aligned with other existing costs, like the European Union’s carbon price (which will likely reach that number in a decade).
- It’s also tied to the social cost of carbon, a metric that measures the economic damage a ton of carbon emitted causes. Estimates of the social cost of carbon keep increasing as climate damages become clearer.
- Another reason could be much simpler. The climate community could just be taking its cue from the DOE, anchoring its own targets to the agency’s 2021 Carbon Negative Shot target, which was set for $100 per ton, CarbonPlan’s Danny Cullenward wrote in an email to Protocol.
So far, no one has come anywhere close to reaching that target. Currently, most carbon removal services cost well above $100 per ton, although the Inflation Reduction Act’s updated 45Q tax credit of up to $180 per ton for direct air capture could help some startups get closer to achieving that target.
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