On March 31, President Biden released the American Jobs Plan, a bold new initiative that could create jobs, advance climate solutions, and center justice in its implementation. Notably, the plan recommends $35 billion in clean energy research, $15 billion in climate demonstration projects, and $5 billion for climate-focused research. This package represents a major departure from previous presidential stimuli that heavily focused on shovel-ready programs, and is an important first step in correcting a decade-long stagnation of federal investments into research, development, and demonstration (RD&D). It is also significant in acknowledging a need to develop climate innovations such as direct air capture (DAC) and carbon storage — solutions that will bring new opportunities to U.S. industries, businesses, and workers in a global economy that is compatible with limiting global temperature rise to 2° C.
Government support is essential in advancing the RD&D for carbon dioxide removal (CDR) innovations needed now and in the decades to come in order to stay within safe temperature limits. The Energy Futures Initiative estimates the size of the need at $10.7 billion over 10 years, twice the amount announced in President Biden’s proposal for all climate research. While the American Jobs Plan calls for 10 demonstration projects for industrial carbon capture and 15 projects in clean hydrogen, the initiative is missing demonstrations that directly remove legacy carbon from the atmosphere (10 gigatons by 2050) or that utilize removed carbon for clean aviation fuels.
Support for long-term research and development has been a strong driver behind U.S. global leadership and competitiveness. For example, the Defense Advanced Research Projects Agency (DARPA) was critical in incubating and helping to scale important technologies such as artificial intelligence, an R&D initiative that started in the 1950s and has become a viable and essential technology we rely on today. Federal RD&D for carbon removal innovations is especially critical as it addresses two key barriers where 1) some approaches may be too risky or uncertain for the private industry to scale, or 2) where individual businesses could not expect to capture significant benefit for themselves within an acceptable investment horizon. Furthermore, aside from securing climate benefits and creating jobs, government support can ensure these new innovations are developed and scaled up in line with principles of equity and justice.
The need for carbon dioxide removal and adjacent innovations in zero-carbon fuels is one of the few climate solutions recognized and welcomed by bipartisan stakeholders. The 2020 Energy Act, the SCALE Act, and the USE IT Act all made clear calls for federal RD&D and procurement of direct air capture technologies, permanent storage, and other removal techniques. The increase from $50 per ton to $180 per ton of CO2 from DAC to permanent storage in the recent proposal to update the 45Q tax credit signals a thoughtful approach to carbon removal to complement, rather than replace, efforts in emission abatements.
Government support for CDR can also enable participatory processes that include the communities most impacted by climate change and who live in areas where projects may be built. A Rhodium Group report highlights that a robust direct air capture industry could create 300,000 jobs — more than the number of workers currently employed in natural gas — and present an opportunity for oil and gas workers to reapply their skills in climate-saving sectors. The operation and maintenance jobs at DAC plants could also be an important employment source for the surrounding communities. For example, the DAC plant being planned in California’s Salton Sea region could employ former agricultural workers who were at risk of losing their jobs due to soil degradation in the region.
Federal investments into carbon removal will spur the creation of an entire industry and open up a range of opportunities for U.S. manufacturing and labor for decades to come. Once the CO2 is removed, it can be safely transported to refineries and be converted to zero-carbon fuels. Paired with a scaled-up green hydrogen system, clean fuels can effectively replace emission-intensive fossil kerosene or reduce the land-use impacts of biofuels currently used in long-haul aviation. RD&D and the subsequent build-out of carbon removal technologies, its transport, storage, and/or utilization will also generate demand for many downstream industries such as concrete, steel, and construction.
President Biden’s proposal is the first step to “boost[ing] America’s innovative edge in markets where global leadership is up for grabs.” There is no question that investment from the federal government helped to make solar and wind the cheapest and cleanest energy sources for today’s grid, and the government has the opportunity to do the same now with carbon removal. Compared to the $20 billion allocated for general climate RD&D and a total of $500 million authorized for CDR from the federal government to date, clean energy will receive an additional $100 billion from the current iteration of the American Jobs Plan. We need carbon dioxide removal to effectively tackle the climate crisis. More catalytic and targeted investments from federal RD&D and procurement will help to create and bring down the cost of important solutions such as direct air capture and zero-carbon fuels.
