2.4 Market Momentum

Restoring the climate is ultimately about ensuring the planet remains healthy for flora and fauna and most importantly habitable for humans. As temperatures rise, the people —whether as citizens, employees, shareholders, or consumers— are increasing regulatory, economic, and societal pressure on both voluntary and compliance-based climate action. Furthermore, a growing number of concerned citizens offset emissions they are responsible for directly.

CDR was originally seen as a complement to avoidance and reduction strategies, in the pursuit of net-zero emissions. Increasingly, however, extreme weather events will shift the focus to climate restoration and therefore net-negative emissions, and the demand for CDR will accelerate.

In compliance markets, as the cap on emissions tightens, the price of traded credits will continue to rise, eventually overtaking the cost of CDR. In the voluntary market, led by the technology and finance field, the effort is shifting from the avoidance-based model to permanent carbon removal, including in notorious cases (Microsoft) to the removal of all emissions since the founding of the company. At the same time, advancements in technology and economies of scale will drive down the costs of various CDR solutions.

McKinsey has projected CDR to become a huge industry: “A CDR industry capable of delivering gigaton-scale removals at net-zero levels could be worth up to $1.2 trillion by 2050. This industry would require input and support from a range of players —including investors, suppliers, buyers, traders, and other intermediaries— with substantial potential value pools estimated for each. These are long-term business opportunities that would require early action to build removal volumes to scale by 2050.”