Carbon removals: advancing a resilient future

Dominique Barker: Welcome to The Sustainability Agenda, a podcast series focusing on the evolving complexities of the sustainability landscape with a view on addressing current issues in a concise format to help you navigate and take action. I’m your host, Dominique Barker. Please join me as we explore today’s most pressing matters with special guests that will give you some new perspective and help you make sense of what really matters.

Julio Friedmann: If you’re not overwhelmed, you’re not paying attention. These are huge numbers. This is an enormous challenge. It is extremely difficult. So if at some point or another you feel overwhelmed, that’s about right.

Dominique Barker: Today we are welcoming back Dr. Julio Friedmann, Chief Scientist and chief carbon wrangler at Carbon Direct. Dr. Friedmann recently served as Principal Deputy Assistant Secretary for the Office of Fossil Energy at the Department of Energy, where he was responsible for the Doe’s R&D program in carbon capture and storage, or CCS and carbon utilisation. He was also a senior research scholar at the Centre for Global Energy Policy at Columbia University, also CPA, where he led the Carbon Management Research Initiative. Before you listen to today, we would recommend listening to our first podcast with Dr. Friedman on global carbon markets entitled Diving into the Carbon Markets, and that’s dated May 17th. That was published on May 17, 2022 with, as you’ll recall, a special starring role by some crows. In today’s conversation, we’re going to cover why developing a carbon market is so important and the future of carbon capture and removal technologies in particular, and their role in how corporates participate in this space. Good day, Julio. Thank you for joining us today.

Julio Friedmann: It’s a treat to be back. Thank you for having me.

Dominique Barker: Starting off, maybe you could walk through your description of the stock of carbon or the inventory and why it’s so important and what we need to do to get that down. If you could break down for us what that stock and flow is and how it’s measured, that would be a great way to start.

Julio Friedmann: Absolutely. Every year, human beings emit something like 40 billion tons of carbon dioxide, about 51 billion tons of greenhouse gases in total. That’s the flow. Then that CO2 and greenhouse gases goes into the air in oceans every year. Over recorded history, we have emitted though about 2.2 trillion tons, and out of that 1.6 trillion tons is still in the air, in oceans. That’s the stock. And it’s important to know that even if we get to zero instantly today. Eh, that would be really great because we would actually stop rising temperatures at that point we would stabilise but we would still have 1.6 trillion tons in the air and oceans and we must remove that stock if we are going to restore climate in any useful way.

Dominique Barker: So maybe you can translate that into the market opportunity for carbon removal of that stock and flow, I suppose. So how do carbon removals fit in with that?

Julio Friedmann: It’s helpful to think about three different attributes in a carbon market. One of those is reductions. And in fact, there are very good things to do to reduce emissions today, and there are aspects of carbon markets that carry those. For example, the destruction of nitrous oxide and methane or efficiency projects qualify as reductions of emissions. There is a separate attribute, which is a preservation attribute, which is not necessarily tied to carbon at all, but is something that is people like and is good. This is conservation of various kinds of wild ecosystems. Then there is removal. Removal is actually what it sounds like where you’re taking CO2 out of the air and oceans. Carbon Direct entered this field and I remain in this field because of the enormous market opportunity in that space. 1.6 trillion tons is a Goliath market opportunity. It is also an enormous challenge. And therein lies both the challenge and the opportunity.

Dominique Barker: Right. So why don’t you get into defining carbon removal? So we’ve heard of so green and Chrome or nature based and engineers. Can you go into some details on the tech options and their readiness today?

Julio Friedmann: Absolutely. So carbon direct, we define this as ten different enterprises basically. And usually people break it down into three groups, one of which is nature based, one of which is tech enabled and one of which is hybrid nature based are things that rely almost entirely on managing ecosystems. So these are things like reforestation or afforestation or managing coastal carbon, blue carbon. It’s sometimes called with things like mangroves and sea grasses or putting carbon back into soils. These are the nature based pathways for lack of a different term. The far engineering end of the spectrum, the purely tech enabled are things like direct air capture or ocean alkalinity enhancement, where you’re basically grinding up limestone and putting a big Tums in the ocean. And those are ones where humans are directly intervening to fix a problem, either by removing CO2 or by ameliorating its effects. Then there are these hybrid solutions where you’re taking a natural process and accelerating it. Something like Carbon Mineralisation falls in this category also what is sometimes called bikers, biomass, carbon removal and storage, for example, bioenergy with carbon capture or things like bio oil injection, where you’re using natural systems and biomass as a conveyor belt from the atmosphere down into the geological systems.

Dominique Barker: And you are in a privileged seat at Carbon Direct at seeing some of these companies being born. How many are companies are you seeing being born with these objectives and are we finally headed towards carbon as an asset class?

Julio Friedmann: Excellent questions. So first, there are an enormous number of companies. Now, that was not the case five years ago. In part, that is because the framework of net zero has really shaken up the gumball machine and net zero does require enormous amounts of CO2 removal to get to zero. Any residual emissions anywhere must be balanced by removal. Now suddenly there are many, many companies in every one of those verticals we talked about where people are trying to remove CO2 out of the air and ocean and are trying to do so for fun and profit. It is also the case that we are starting to see carbon entering the valuations in markets in some cases as a liability, but in other cases, as you said, as an opportunity where people say, I can. Store CO2 in my land, or I can store CO2 in my poor volume and I can hold carbon indefinitely or for a long period of time. That durability and that volume become assets and natural resources that can be marshalled and deployed just like any other natural resource.

Dominique Barker: That’s great. I’m happy to hear that there are many companies today that are helping to solve and that we’re going to finally have carbon as an asset class. Could you talk us through the range of net zero corporate participation around the world? I know that you’re involved with with many Fortune 500 companies. What’s an example of a large company that’s made such a commitment? And what are the different ways that corporates can achieve net neutrality or become even carbon negative? And maybe you don’t even like those terms. Feel free to correct them.

Julio Friedmann: Let me give you three very different examples. One is the first company we work with, Microsoft. Microsoft said, not only will we stop all of our emissions scope one, two and three, and we’ll do that by 2030, but then we will remove all of our historical emissions, and we’ll do that by 2050. So they are going to zero very fast. That includes removals for their residual emissions. And they have also said we will clean up the room afterwards, we will go negative for 20 years or however long as necessary, even beyond potentially. That news came out just two or three years ago. It was a bombshell that really made a difference in reverberated in terms of ambition and opportunity. Completely different end of the spectrum. A company like Dow Dow has made very real net zero commitments, scope one, two and three. They have said they are not 100% sure how to get to scope three by 2050. But they have interim goals. They have goals for 2025 and 2030 and 2050. They are building net zero assets to really reduce their footprint and they are seeking ways to clean up their plastic pollution as well as to clean up their carbon pollution. And so that is a completely different level of ambition because a company like Dow has a 50 times more emissions. It’s just much harder to do. And then last but not least, you can think of a company like Xcel Energy, a power generator in the United States, and Xcel made a net zero commitment years ago and same sort of thing. They said, we know how to get 90% abatement. We don’t know how to get the last ten, but we’re going to start fast and we’re going to start hard. And they are well on their way towards deep, deep reductions and profound reductions. And they are getting increasingly towards the point where they are going to have to bring net zero and CO2 removals into their portfolio in order to hit those targets.

Dominique Barker: Another concept that I’ve seen in the corporate world is this concept of insets. What is the difference between carbon insets and carbon offsets or carbon credits, and how are corporates using both of these?

Julio Friedmann: So insets is a fairly new term and it’s a little confusing because many people use the words differently. The definition, which seems to be used now by companies is an inset is something they can do within their own assets as a way to remove CO two. So let’s say for example, you’re a company like ConocoPhillips and you own a lot of land if they can use their existing land and their existing assets as a way to remove CO two, that is something that they can do that is quite different than offsets in which you are going to a market and trying to purchase those attributes. So an asset effectively is something you can actualise within your own asset base and then offset is something where you need to go outside that asset base. I have to say that this is good to see. I think companies are going to find themselves discouraged when they realise how little in setting they can actually do. The tonnage involved is just very, very large.

Dominique Barker: Thank you for that. And it is a term that I’ve seen only recently and I’ve been a bit, so thank you for that clarification and explanation. Could you explain the concept of a just transition and in particular what role carbon removal can play to ensure that no one is left behind in the transition to a net zero and climate resilient future?

Julio Friedmann: Sure, just transition is very much a moving target. It is very much in the eye of the beholder. There is no clear and consistent definition of what it is. I’ll tell you some of the things that I believe people want to see in a just transition. And these are things that I would certainly want to see in a just transition as well. One of the things to see is that the benefits that come from these expenditures around carbon actually flow to the communities where they are vested said differently if you’re going to do a green. Project or a carbon removal project. In a place like Ghana, you want to make sure that a lot of the benefits flow to those communities in Ghana, that they’re not just flowing to corporate boardrooms. Another thing that people want to see in just transition is that these projects go forward in a way that do not further disadvantage some communities. So, for example, if you’re going to build a large direct air capture facility, you want to make sure that it doesn’t create new environmental problems as you do it. Both of these things absolutely can and should be done. Whether or not we do them is up to us, but there’s no particular reason why we couldn’t do those things. Last but not least, people want to see a just transition emerge which creates living wages in which economic benefits are broad. And all of those things are. Great. I would love to see them all. Again, we’ll have to see how that gets executed. My concern about just transition is that that becomes a. Unreachable target that prevents starting in many cases. We need to get going and we need to get going fast with projects. We should absolutely do our best to make them as just and as fair and as welcome and as ecologically positive as possible. But we really cannot let the perfect be the enemy of the good here. We have to get going. And if just transition becomes a guide, awesome. If just transition becomes a block, not so awesome.

Dominique Barker: Yeah. And the way the way I’ve always described just transition is just focusing on the people. So you make the metrics about people and whether that’s retraining or ensuring fairness in terms of that transition. So thank you for that commentary. Maybe just if you could touch on where you believe developed carbon markets fit in with all of this, why is it so important for the continued path to net zero?

Julio Friedmann: Existing markets are what we have and because it’s what we have, it’s a good place to start. We all see real challenges in existing carbon markets. Those challenges include lack of additionality. In some cases, existing carbon markets have double counting. Some projects are poorly managed and executed. Some are flatly fraudulent. This is well known and there are many, many groups in the active carbon markets today that are seeking to improve the markets and redress those issues. Some groups are creating standards and protocols that will help avoid bad problems. Some are improving the existing standards and protocols. Many of the certifiers have realised that they need to do a better job, for example, and are going about with that. There are also external groups like the ICI, VCM, the Integrity Council for the Voluntary Carbon Market, and all of their partners that are seeking to again improve the market by creating guidelines and principles and practices that lead us to a better place. Again, it’s good to get going. It’s good to start with what we have, but we have to be mindful of the existing shortcomings of the market as we seek to improve it.

Dominique Barker: That’s great. And maybe I’ll just end with I mean, I think sometimes the show can be a little overwhelming when we talk about billions of credits, billions of tons of emissions and trillions, it can be very overwhelming for the audience and maybe just bring it down to the individual level. Dr. Friedman, do you have advice for just any advice or just to make it a little bit more localised into someone’s household of of either what they could do with regards to decarbonisation?

Julio Friedmann: Absolutely. And if you’re not overwhelmed, you’re not paying attention. These are huge numbers. This is an enormous challenge. It is extremely difficult. So if at some point or another you feel overwhelmed, that’s about right. But whether or not I’m optimistic or pessimistic, the work looks the same. Whether or not I’m on track or overwhelmed, the work looks the same. So every day you got to wake up, dust yourself off and say, what can I do in that context? A couple of things. First of all, vote. The most important individual action anybody can take is to elect people who care about these things. At the end of the day, this requires international diplomacy. It requires collective action at a very high level. And so, in fact, voting climate matters quite a deal. Another thing that people can do is they can, in fact, just be mindful of what they’re doing. There are some people who have the luxury of being able to do some in setting themselves. There are some people who have the wealth and the wherewithal to be able to purchase projects and products that are better and for those who are truly able to do so. There are places you can go today into the carbon market and buy valid, durable CO2 removal. And increasingly, that’s becoming easier to do. So you can vote with your feet in many ways. There is, however, no simple, straightforward action that solves this problem. It’s going to be many, many, many actions by many, many people. The last thing that you can do whenever you feel overwhelmed, whenever you’re not sure what else to do. Be generous with each other. It is easy to become militant or balkanised or angry or fearful. To quote Yoda. Fear leads to hate, and hate leads to suffering like this is not going to get us out of this problem. At the end of the day, we’re going to have to work together, and that’s going to require unprecedented acts of generosity. Modelling that behaviour now is a good thing for everyone to do.

Dominique Barker: Thank you very much, Dr. Friedman. Taking it down to people I think is always going to be very important as we navigate this transition to especially the next decade. Thank you very much for your time today and for joining us on the sustainability agenda.

Julio Friedmann: It was a great pleasure. Thank you.

Dominique Barker: Please join us next time as we tackle some of sustainability. Biggest questions, providing different perspectives to help you move forward. I’m your host, Dominique Barker, and this is the sustainability agenda.

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