Does CDR provide “moral hazard” for avoiding deep decarbonization of our economy?

No. But the fact that some environmentalists question the value of developing Carbon Dioxide Removal (“CDR”) approaches for this very reason merits greater analysis. The “moral hazard” argument against CDR goes something like this: CDR could be a “Trojan horse” that fossil fuel interests will use to delay rapid decarbonization of the economy, as these fossil interests could use the prospect of cost-effective, proven, scaleable CDR technologies as an excuse for continuing to burn fossil fuels today (on the grounds that at some point in the future we’ll have the CDR techniques to remove these present-day emissions).

The key problem with this “moral hazard” argument is the hypothesis that “cost-effective, proven, scaleable CDR solutions” are poised to proliferate at greater rates than GHG emission mitigation technologies (such as renewable energy and energy efficiency) that are required to decarbonize our economy. Today, CDR solutions remain largely in their infancy. Installed bio-CCS plants can be counted on one hand, for example, and not a single commercial-scale Direct Air Capture project has been built to date. Renewable energy, however, has had a considerable head start on CDR technologies on reducing costs. Take solar PV systems as an example. As the chart below shows, solar PV panels have dropped in cost from over $75/W to under $0.75/W over the past four decades.

price of solar power drop graph Cost of Solar Panels    10 Charts Tell You Everything

Source: Costofsolar.com

This cost reduction in the price of solar PV panels happens to be exactly what economic theory would predict. Learning curve models show that that costs of energy technologies come down in a predictable fashion as cumulative installed capacity increases. The graph below shows learning curve estimates for a range of energy technologies.

Learning curve for power generation technologies

Source: http://energy.jrc.ec.europa.eu/Pages/ArticlesETD.htm

So what does this mean for the “moral hazard” argument against developing CDR solutions?

For this “moral hazard” argument to be valid, we would have to believe that CDR approaches will be able to not only catch up to other renewable technologies in cost within a short-time frame, but then continue to reduce costs more quickly. Otherwise, renewable technologies will continue their inevitable march down their cost curve, and will continue displacing fossil sources in our energy mix.

Suggesting that CDR approaches will outpace other decarbonization technologies doesn’t seem particularly plausible. This is because the technologies that have the “steepest” learning curves are usually those that can be manufactured and installed in assembly-line type manners (like solar PV panels or fuel cells, for example). Most CDR technologies do not fit this mold — for example, large scale bio-CCS projects frequently require many bespoke designs to fit particular plants/geographies. Direct air capture and small-scale biochar pyrolyzers fit this assembly-line model better, but there is no reason to expect these technologies to come down cost curves more quickly than their renewable complementors.

In fact, this learning curve analysis would suggest that CDR faces the opposite of a “moral hazard” problem — because CDR remains so far behind other renewable technologies, we will keep building more and more renewables and neglect to develop CDR, which will seem expensive by comparison. Neglecting CDR in this fashion would be fine if we didn’t need negative emissions as a society. But if we find that negative emissions are necessary in a few decades, and we haven’t started developing CDR technologies? Then we are like to find that the initial CDR deployments are incredibly expensive and thus not politically viable. So there is a strong argument to be made for us to start developing CDR technologies today alongside renewable energy technologies, so that if/when we need to start removing carbon from the atmosphere, we have a suite of viable solutions to do so.

In conclusion, it’s simply not worth worrying about a “moral hazard” problem that we won’t have for at least decades, and are most likely to never have all — especially when the problems of not developing CDR solutions today could be much more severe.

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2 thoughts on “Does CDR provide “moral hazard” for avoiding deep decarbonization of our economy?

  1. Dear Noah

    Thank you for your interesting commentary, which has been shared with the google geoengineering group where i saw it.

    I dispute the premise that decarbonisation is a valid moral goal. It is entirely possible to stabilise the climate within a fossil fuel based economy as long as we develop ways to remove the produced carbon dioxide. This has to be done in a commercial way in order to be scalable and sustainable.

    The central problem of global warming is summarized in the McKibben Stock Price Problem. This is the fact, as noted by leading climate scientist Bill McKibben, that the stock prices of leading energy companies all factor in plans to move enough carbon from the crust to the atmosphere to cook the planet. This is not possible, because under the business as usual scenario the economy would collapse before the ecosystems collapse.

    The relation between the economy and the climate is a simple matter of physics, an input-output problem. Climate stability is a prerequisite for economic stability. The solutions to deliver climate stability are either to either move less carbon (reduce emissions) or stabilise carbon once it is moved (Carbon Dioxide Removal). Current plans to move carbon without stabilising it are not possible due to the constraints of physics. And Solar Radiation Management is an emergency tourniquet, not a climate solution.

    Reducing emissions is the primary focus of global warming politics, supporting the premise of decarbonisation of the economy. But emission reduction faces massive, apparently insurmountable, problems, seen in the 2.5 ppm per decade acceleration of the CO2 emission increase rate in recent decades. The economic incentives to burn coal and gas and oil are more powerful than the political incentives to switch to sustainable energy. And in any case, emission reduction still assumes ongoing increase in CO2 level in the air. This should be unacceptable, because we need to drive CO2 levels down through new negative carbon technologies.

    The feeble political agreements around emission targets are unachievable and useless, essentially serving as a cover for failure and denial. The political targets of ongoing warming build in massive danger of phase shift from the stable Holocene climate pattern that has prevailed for the ten thousand years of the growth of human civilization on our planet.

    So there must be a technological focus on CDR, or we cook. An end to Holocene stability is an unacceptable risk with a planetary population of ten billion people, given the likelihood in a 700 ppm world by 2100 of conflict and collapse of civilisation and massive loss of biodiversity.

    In London in 1850, the problem of cholera was solved by engineering, pumping sewage out of the city. Global warming is like a cholera epidemic for the twenty first century. We need new sanitarians to work out how to pump carbon out of the air and sea to solve the problems of global warming and acidification. Funding that process means establishing economic and scaleable methods to convert the harmful extra CO2 into useful forms. That means finding practical commercial uses for more than ten billion tonnes of carbon every year. The only way to do that, in my view, is to apply solar and ocean energy to grow algae on industrial scale.

    This call to focus on algae as a useful form of carbon requires understanding of the distinction between carbon storage and carbon utilization. Storing CO2 through geosequestration is not an economic solution to global warming. Carbon stored as CO2 has no value, except to help pump up more fossil fuels. But if CO2 is converted to algae, and the algae is then held in large fabric bags at the bottom of the sea, we have an enduring resource, a carbon bank.

    The ocean is a perpetual motion machine driven by earth’s orbital dynamics. Two billion cubic kilometers of water move up and down by about half a meter each tide on average. Tapping a fraction of this energy source for pumping should be a primary objective for an algae production system. Such a system would not decarbonise the economy, but would enable a massive increase in the practical use of carbon. We can apply ingenuity and know-how to create innovative new methods to make good use of the stored carbon, especially in infrastructure and energy and food. An industrial algae production system that is automated, using oceanic energy to manufacture its own replication resources, can become highly profitable. Against this objective, ideas about prices on carbon, and the associated strategic model of decarbonisation, are irrelevant and useless. We need a new integrated economic and ecological paradigm with a focus on mining more carbon than we emit.

    The stock prices of energy majors can remain realistic only if their factored carbon reserves can be stabilised once they are burnt into the air. This is not a moral hazard but a moral opportunity. Stabilising the climate means mining the produced CO2, and turning it into useful commodities.

    Robert Tulip

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