Closing the Loop: How the Measurement Economy Can Unlock Carbon Capture and Storage’s Vast Potential
The fight against climate change was front and center as global leaders gathered in Egypt for COP27. The severity of the crisis and the urgency of action needed to meet the Paris Agreement goals has come into sharp relief as some of the world’s brightest minds gather to talk about solutions.
But there’s good news—here in the United States, the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law (BIL) have unlocked the opportunity to deploy climate change-abating decarbonization projects and infrastructure. This marks a watershed moment for technologies such as Carbon Capture & Storage (CCS).
The technical feasibility and efficacy of CCS has been known for decades, but a lack of certainty surrounding economic incentives and policy support prevented rapid scale-up. However, CCS’s days as a limited carbon abatement technology appear over as the IRA and BIL have removed these market-tempering uncertainties. CCS projects are now significantly more cost-effective, setting them up to play a key role in net-zero commitments while signaling to the world that the U.S. will lead the push to net zero.
A Race Against Time
Policy and economic certainty provide a stable foundation for the success of decarbonization technologies. However, several obstacles remain. Shortening the permitting process for decarbonization projects is one of the keys to their success, federal permitting processes have yet to catch up with the pace of this space. Attempts have been made to address this hurdle, most notably by Senator Joe Manchin, but to date, have been unsuccessful. The U.S.’s climate goal attainment will remain in jeopardy until we streamline the permitting process.
There is also a need to debunk myths and conjecture surrounding CCS and its important decarbonization role. The United Nations Intergovernmental Panel on Climate Change (IPCC) clearly states not only the efficacy of CCS as a greenhouse gas abatement solution, but also the critical role CCS must play if we are to meet our collective sustainability goals. Nevertheless, counterfactuals from less progress-oriented voices have continued to proliferate casting doubt as to the safety and effectiveness of CCS. Again, this is where the power of trusted and transparent measurements can thwart uncertainty or misunderstanding to deliver stakeholder harmony and agreement. Education utilizing real data, not estimates or assumptions, supports the modern-era social license to operate while assuaging “not in my backyard” concerns.
Finally, one last domino needs to fall for decarbonization technologies to achieve their full potential. Estimates have concluded that we need investments as high as $5.8 trillion per year to reach net zero by 2050. Hitting these targets will require significant amounts of capital from institutional investors, which typically demand higher thresholds of investment return certainty and a longer track record sector performance at scale which decarbonization projects do not currently possess. It is essential to remain patient with a long-term outlook. While ESG funds may be underperforming the market now, the long-term investor sentiment behind the meteoric increase in ESG focused capital is here to stay. Consumers and investors value their money going to projects and companies they are certain will have long-term viability in a lower carbon global future. The proof of this is the unwavering commitment of stakeholder capitalism backed by financial heavyweights such as Larry Fink, Mark Carney, and Jamie Dimon and responsible investor coalitions such as the Institutional Investors Group on Climate Change snowballing in size.
Closing the loop with Project Canary
The common harmonizing principle across these challenges is a need for better trusted high-fidelity measurements and data to thwart conjecture and misunderstandings about CCS projects. To ensure social license to operate, CCS projects must transparently demonstrate safe, permanent carbon storage back into the ground. Accurate, trustable third-party measurements provide science-based verification of the green credentials of CCS, thereby attracting capital allocation while also reducing capital risk. Third party measurement will also help build trust among the general public. Recent polling from Ipsos found that only 22% of people find oil & gas to be a trustworthy industry. The industry best suited to maximize the potential of safe and secure geologic carbon sequestration is not broadly trusted by stakeholders — independent measurement can help build trust.
With a measurement, reporting, and verification (MRV) process, companies have a yardstick to measure continuous improvement to reach the highest sustainability standards, producing the green receipts society demands. The World Bank succinctly states, “MRV is the key to unlocking climate finance and showing progress on climate goals.” Radical transparency and measurement fidelity will differentiate projects, players, and molecules in the CCS sector and catalyze marketplace innovation in areas such as carbon offset markets.
Indeed, measurement means everything to CCS’s success. That’s why Project Canary is primed to enter the CCS market. We will provide products and solutions via our rigorous third-party engineering-based environmental assessments and digital MRV platform for the capture, transport, and storage market segments.
The carbon management equation is a two-sided coin. We must simultaneously focus on measuring and certifying better-produced hydrocarbons out of the ground while measuring and verifying safe, permanent carbon storage back into the ground. As we build out our products and services for the latter, we look forward to partnering with market leaders to alter the arc of climate change and give emissions the bird!