Turning Carbon Into Gold: Incentivizing the New Alchemy

One approach to help address climate change is carbon capture and utilization (CCU). CCU involves capturing atmospheric carbon dioxide and using it to generate marketable products. CCU, however, needs significant additional research and development to reach its potential. Development of CCU could yield benefits far in excess of its actual ability to sequester carbon.

Research and development of CCU could stimulate improvements in carbon capture technologies, incentivize the capture and sequestration of carbon, and generate products that can benefit society generally. Nevertheless, most CCU uses remain only theoretical, or significant barriers prevent their current implementation. A number of policy tools are available to incentivize CCU research: patents, prizes, grants, and tax credits. This article reviews the strengths and weaknesses of each.

Then, it discusses how best to apply these policies to incentivize a number of possible CCU opportunities, including construction materials, fuels, chemicals, and algae-derived products.