Elon’s prize is just the beginning when it comes to driving much-needed innovation and transformation in the carbon removal field.

First, what’s the deal with Elon’s $100M carbon removal prize?

Prizes have long captured the imagination of billionaire carbon removal philanthropists (see Richard Branson’s Virgin Earth Challenge from 2007). But where previous efforts have fizzled, Elon’s effort sounds very promising: as I mentioned to Bloomberg, the XPRIZE team administering the prize is highly knowledgeable about carbon removal, experienced with prize execution, and have been very deliberate about incorporating a wide range of stakeholders’ input in their prize design. My hope is that the high visibility from Elon’s involvement will inspire a new generation of entrepreneurs and technologists to devote their energy and creativity to carbon removal, which as a field lags far behind other clean energy technologies in the journey to large-scale climate impact.

Bottom line: a robust ecosystem of carbon removal innovation has emerged in the relative blink of an eye.

How does the prize fit into other carbon removal innovation efforts?

While Elon’s tweet might be the most high-profile endorsement of carbon removal to date, it follows a number of lower-profile — but no less significant — innovation efforts happening across the US. In fact, the US Congress (not exactly known for innovation…) beat Elon to the punch at the end of 2020 by authorizing not one but two separate carbon removal innovation prizes: one administered by the Environmental Protection Agency (EPA), the other by the Department of Energy (DOE). These government prizes complement both the expanded grant funding for applied innovation projects at DOE for a range of carbon removal approaches, and ARPA-E’s work on the topic. In conjunction with state efforts like New York’s CarbonWorks Foundry, public funding for carbon removal innovation has started to approach the levels recommended by the National Academies.

Private sector carbon removal innovation efforts have also flourished in the past few years. Startup programs — both for-profit like YCombinator and non-profit like Activate and Carbon180’s own Entrepreneur-in-Residence fellowship — have supported companies working on carbon removal. Investors ranging from offshoots of oil and gas companies like Oxy Low Carbon Ventures to shops with tech roots like LowerCarbon Capital and Incite.org are making bets on novel carbon removal technologies. And corporate climate leaders like StripeShopifyMicrosoft, and Amazon have announced carbon removal procurement targets with the explicit aim of driving innovation through early demand creation.

Bottom line: a robust ecosystem of carbon removal innovation has emerged in the relative blink of an eye.

What’s next for carbon removal?

So is Elon’s prize the icing on the carbon removal innovation cake, and can we all go focus on other pressing problems? Not quite…

While Elon’s prize is very additive, no innovation effort alone will bring a field as big as carbon removal to scale — there is significant value in taking multiple approaches (whether prizes, applied innovation funding, or venture investment). The diversity of solutions with large-scale carbon removal potential (i.e. spanning natural ecosystems and industrial technology) also shows why it’s important to spread innovation bets widely early on, in particular to avoid any suboptimal technology lock-in effects. So yes, there’s plenty of space left for high-impact efforts to advance carbon removal innovation.

That said, a major lesson we can take away from the history of other clean technologies is that the biggest driver of innovation isn’t venture investment, government grants, or prizes — it’s customers. Customers can come in many shapes and sizes, ranging from individual consumers all the way up to the US government itself. But the unifying lesson that the history of solar, wind, and electric car development shows us is that policy change is essential for climate technology developers to gain a foothold with customers of any shape or size, which in turn fuels a positively-reinforcing cycle of further innovation and appeal to a broader customer base.

And that’s what I hope the prize ultimately does: shines a light on carbon removal, and inspires the next wave of policymakers, investors, companies, and philanthropists to advance the field. A $100M prize really is just the tip of the iceberg — headlines from our carbon-removing future will need to highlight investments in the trillions (with a T) of dollars of capital deployed, and this will take a wide range of stakeholders across sectors of the economy all working to advance innovative carbon removal solutions.

Image: SpaceX