Scientists agree: avoiding the worst impacts of climate change requires both cutting emissions and actively pulling carbon dioxide out of the atmosphere and durably storing it. The US has made early strides, but many key challenges remain. Critically, the market remains too small, too concentrated, and too dependent on a handful of voluntary buyers to reach the scale we need.
Carbon removal is a public good, not a traditional commodity, which means that growth will largely depend on supportive public policy that bolsters demand. Without a durable, diversified base of buyers, developers will struggle to finance new projects, costs stay high, and the industry stalls.
A three-part policy framework — a “Demand Triangle” — would fix that.
- Start with public procurement. The federal government must be a buyer of first resort. A well-designed purchasing program sets industry standards for accountability and community engagement, while signaling to private investors that this market is real. Recent bipartisan legislation would expand procurement across multiple carbon removal pathways — a critical step toward building industry-wide credibility and crowding in private buyers.
- Shift costs to industrial emitters. Voluntary and public purchasing alone won’t get us to our goals. We need a broader, compulsory set of buyers. A targeted compliance mechanism focused on heavy industry could require large emitters to purchase carbon removal credits to compensate for a gradually increasing portion of their emissions, as well as raise revenue to be reinvested in clean industrial technology development and deployment. Unlike an economy-wide carbon tax, this approach avoids raising costs on everyday goods like gasoline or groceries, while creating a clear incentive and new resources for companies to invest in cleaner technologies. Over time, as those technologies mature, credits purchases cover a smaller pool of remaining emissions — and by then, US developers will be positioned to supply a global market.
- Level the playing field with trade policy. Requiring domestic manufacturers to compensate for their emissions while foreign competitors face no equivalent rules is a recipe for outsourcing — jobs and pollution alike. A carbon border adjustment mechanism would apply comparable fees to carbon-intensive imports, protecting US industry and rewarding cleaner manufacturing. It would also ground tariff policy in transparent, rules-based standards, replacing the current policy of fluctuating tariffs that has created uncertainty across industries and stalled investment.
Successful climate policy should avoid raising costs for consumers in the short-term and provide an avenue to decrease costs over time. By targeting industrial goods, rather than consumer-facing goods, and pairing carbon removal requirements with trade protections, the Demand Triangle creates conditions for a successful carbon removal industry while limiting consumer exposure to price increases. The goal is a policy package that can grow and sustain an effective CDR industry while supporting the deployment of clean industrial technologies at scale that ultimately reduce costs.
The US has the innovation ecosystem, technical expertise, and geographic advantage to lead a global carbon removal industry worth up to $1 trillion by 2050. The Demand Triangle offers a roadmap to get there that works for the climate, for industry, and for the communities that will feel the consequences of inaction the most.
Read the full memo here.
Edited by Ana Little-Saña. Image by Venti Views.