Insights Blog

As the impacts of climate change – from wildfires to flooding – become impossible to ignore, calls to adapt our economy are joined by calls to remove and store existing carbon dioxide, a process known as carbon drawdown. In response, market actors have launched profitable ventures in mechanical-chemical carbon dioxide removal (CDR) and sought government support. But just how effective and sustainable are these ventures?

In a recently published paper, New School for Social Research PhD candidate Andreas Lichtenberger and co-author June Sekera, Director of the Public Economy Project at the New School’s Heilbroner Center for Capitalism, review the literature on carbon dioxide removal and find that the use of public funds to subsidize commercial CDR is often counterproductive. They argue that governments should instead approach carbon reduction as a public service.

The paper focuses on the two CDR options which have gained the most legislative traction: point-source capture and direct air capture, which together the authors term “industrial carbon removal” (ICR). The authors review and discuss the effectiveness of each ICR method, asking whether it removes more CO2 than it emits, determining its resource usage at scale as well as its biophysical impacts.

Fig. 1 Full life cycle. Pathways associated with industrial carbon removal (ICR). (Image elaborated from Wikipedia entry on carbon capture and utilization and from Stewart and Haszeldine 2014.) 

The paper reveals that commercial ICR methods incentivized by governments emit more CO2 than they remove and thus do not meet the needs of atmospheric CO2 reduction. Some studies have found ICR methods (both point-source capture and direct air capture) to be net CO2 reductive through methodological choices by ignoring aspects of the process (like the fact that captured CO2 is primarily used for oil production) or assuming low-or zero-carbon power. The authors also find inadequate literature examining the resource usage and biophysical impacts of ICR methods at a significant scale.

The review shows that scientific literature does not support the use of public funds to subsidize commercial development and deployment of ICR, and that policy decisions have thus far been finance-driven, not science-driven. Instead, the authors recommend that governments approach atmospheric carbon reduction as a public service, like water treatment or waste disposal, because storage – not sale – of captured CO2 is the only way to achieve a true reduction of the gas.

Our ongoing video series, SCEPA Responds, brings together expert economists, professors, fellows, and research associates to discuss current economic issues and challenge economic doctrines that create systemic inequity. The series focuses on areas such as race, monetary and fiscal policy, and economic growth and crisis, to provide insights for working families, older workers, the working poor, minorities, and more.

Much like the United States, the Brazilian government was slow to react to the virus, and Brazil joined us as one of the global epicenters of COVID-19 cases and deaths. New research shows that, also like the States, pre-existing inequities in living and working conditions along racial, educational, and class lines are at the root of the higher infection and mortality rates observed in low-income and non-white communities. The research also shows that without government aid, COVID exacerbates inequality.

Research from SCEPA economists studying the economic impacts of climate change and mitigation policies show green bonds have great potential to help countries across the world increase environmental investments and reach emission targets.

While tax increment financing (TIF) is a common tool for municipalities to fund economic development (read how it works here), it is responsive to the legal, political, and economic environments of the locality in which it is implemented. 

On August 14th, the anniversary of the Social Security Act of 1935, the Joint Economic Committee (JEC) of U.S. Congress released two reports on the weakening of the American retirement system featuring research from SCEPA.