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New York Climate Week 2021: Global Roundtable on Negative Emissions and Carbon Management technology

Deep Green Media were thrilled to convene a Global Roundtable on Negative Emissions and Carbon Management Technology Roundtable, hosted by Carbon Direct and the UN-convened Net-Zero Asset Owner Alliance, with over 350 participants registered from across the finance, public policy and business sectors. 

The roundtable moderator, Laura Zizzo - co-founder and CEO of Manifest Climate - engaged the expert panel on the investability and potential of carbon removal, reduction and management technologies to accelerate progress towards net-zero emissions, while evaluating the role of government policy and regulation in this process.

“It’s time to invest in solutions that we know we need. The recent NDC announcements that came in recently reinforced the extent to which current pledges under the Paris Agreement are not sufficient to keep to the Paris agreement goal of under 2°C rising global temperatures. We need to quickly ramp up the ambition and start removing carbon from the atmosphere,” Zizzo said.

Jonathan Goldberg, founder and CEO of Carbon Direct, noted that an estimated US$3 trillion of finance is needed to scale-up carbon management to reach the required 10 gigatons per annum.

“This is equivalent to moving eight times the mass of all humans on earth every year forever. That is quite a big challenge to scale, both the carbon removal and carbon management,” he said.

 On a positive note, carbon markets have experienced an exponential increase in voluntary commitments, policy provisions and keen interest from investors in recent years. An explosion of companies and enterprises with declining cost curve technologies for CO2 removal and management while increasing revenue, has been observed in both regulated and voluntary carbon markets. 

John Scott, Head of Sustainability Risk at Zurich Insurance Group, addressed the urgency of reducing emissions from fossil-fuel intensive industries and agriculture, forestry and land use (AFLU), while significantly scaling up investments in bioenergy with carbon capture storage (BECCS), direct air carbon capture sequestration (DACCS), and biomass carbon removal and storage (BiCRS).

At the roundtable, Scott launched the Net-Zero Asset Owner Alliance’s new position paper, The Net in Net Zero, which highlights the effectiveness of managing emissions arising from supply chains and adopting engineered solutions for massive GHG removal from the atmosphere. The paper explores the potential of nature-based solutions and land-based carbon sinks as two crucial pathways to keep the global temperature rise to below 1.5°C.  The paper emphasizes that the next decade should focus on three key tools to draw down carbon in line with Paris Agreement targets: abatement, compensation and neutralization to scale-up ambitious climate actions. 

Abatement of emissions in a wide range of technologies, changes in processes, business models and operations is essential in order to deliver vital services across all sectors of the economy, including energy, transportation, infrastructure, agrochemicals and food systems. 

“All these essential services have to be done in dramatically different ways, low carbon ways and in the case of energy; by creating low cost and secure energy,” said Scott.

Compensation, another essential tool, consists of advancing financial instruments and investments in methodologies and technologies for reducing CO2 from the atmosphere. Carbon credits are considered as a complimentary financial instrument in approach to compensation. “It is very important that we have scalable, transparent, liquid, reliable and high quality carbon markets,” said Scott.

And lastly, neutralization, which focuses on negative emission technologies that absorb CO2 from the atmosphere by using biological and technological solutions. 

Dr Marc-Gregor Czaja, Global Head of Equities and Derivatives at Allianz Investment Management, supported Scott’s stance on escalating investments in biological and technological solutions. He believes that Nature Based Solutions (NbS), which aim to restore degraded landscapes and habitats such as mangroves, peatlands, coastal wetlands and aquatic ecosystems, currently available for deployment at reasonable prices, have tremendous potential to abate emissions.

Currently nature removes 44% of GHG emissions from the atmosphere. However, the markets for NbS are still at initial stages. Given current economic conditions and associated pricing risks combined with the conservative mindset of investors, NbS have received limited investments and coverage. Being broadly investable, the markets for NbS are expected to expand this decade. “Beyond scaling up Nature Based Solutions this decade, we also need to scale technology based solutions, and that's where our economics is a little bit more challenging,” Czaja said 

Implementation of the above mentioned tools, methodologies, technologies and pathways, will require robust regulatory intervention alongside strong policy support, financial incentives & instruments and disclosure frameworks.

Shuchi Talati, Chief of Staff, Fossil Energy & Carbon Management at the US Department of Energy (DOE), noted the optimistic response and interest from the US federal government in investing in carbon reduction technologies and associated regulatory frameworks, although progress on implementation is at an initial stage.

“Although we are seeing a lot happening in the government space, which is incredibly exciting, it is still not enough,” Talati said. She criticised the lack of funding in infrastructure packages being one of the key reasons limiting de-risking for early stage aspects of carbon removal approaches. Industrial scale solutions are required to observe significant reduction in carbon emissions, and these will require support to start with. 

Julio Friedman, who leads the CaMRI Initiative at Columbia University in the City of New York and is a Senior Research Scholar while supporting Carbon Direct as a Senior Science Advisor, elaborated that achieving net-zero emissions requires investors and corporate leaders to invest in carbon reduction and removal strategies simultaneously. 

In addition, in order for progress to happen, all stakeholders must dive into the granularity and materiality of measuring, monitoring and managing emissions. Understanding these details will be necessary to effectively mitigate and manage emissions reductions in a systematic manner. Removed, reduced and avoided emissions are all technically and scientifically distinctive from one another and hence should be addressed differently. Investment in each category of emissions reductions also requires a different business model and investor profile. Despite having all the research, tools, scientific evidence and resources in the markets, we have not scaled enough technological solutions or utilised them to their maximum potential to deliver on emission reduction targets. 

“Scaling is about deployment that requires investment, innovation and market aligning policies. We know how to pull CO2 out of the air and oceans - we have been doing it since the 1930s, we know how to turn biomass into energy, we know how to mineralize CO2, and we know how to do carbon capture. The mystery is not about what to do but whether or not we will do it, as people are haggling over pricing,” Friedmann said.

Unlocking institutional finance remains a significant hurdle in scaling up investments for technological solutions. Lack of certainty on whether these investments have the potential to remove or reduce carbon emissions and absence of policies for private capital to flow into these markets, makes it more skeptical for investors to explore.  To ensure the credibility of investments, an independent regulatory body should be established with principles and frameworks to guide effective monitoring and to quantify the volume of carbon emissions removed and reduced. 

In conclusion, the potential of the pathways described above can only be realized by integrating climate science, policy and finance. Regulatory bodies, institutional investors and government policies all have vital roles to play in radically transforming the structure of carbon markets to achieve net zero. Effective collaboration between governments, investors and scientists is crucial to mitigate carbon emissions already present in the atmosphere, while simultaneously managing the flow of emissions into the atmosphere.