Elon Musk just bought $100 million in publicity for the carbon capture industry
There is no way to stabilize the world’s temperature without an aggressive plan to pull carbon out of the atmosphere. The Intergovernmental Panel on Climate Change estimates than more than 3 to 7 gigatons (GT) of CO2 will need to be removed per year by 2050—up to 15 GT by the end of the century—to limit warming to 1.5° C. That’s akin to “running the fossil fuel industry in reverse,” says Rob Jackson, an earth system science professor at Stanford University who leads the Global Carbon Project.
While plenty of technology exists to extract and sequester CO2, ranging from biofuels to direct air capture, none have been scaled up commercially.
On Jan. 21, Elon Musk fired up the climate community by offering a $100 million prize (about .05% of his estimated net worth) to any team that comes up with the best way to capture carbon. It’s a small but meaningful addition to the $4 billion committed to such projects in 2020. Details are reportedly coming this week.
Am donating $100M towards a prize for best carbon capture technology
— Elon Musk (@elonmusk) January 21, 2021
Musk, by offering the prize, joins a long line of governments, industrialists, and charities seeking to inspire new technologies over the past 500 years. Recently, the MacArthur Foundation put up $100 million for proposals promising “real and measurable progress in solving a critical problem of our time.” The Breakthrough Initiative extended two $100 million prizes searching for signs of alien life or demonstrating a fleet of spacecraft that can reach the Alpha Centauri system, our closest celestial neighbor at about four light-years away.
Some prizes appear to have worked: Since the 16th century, vaccines, lifeboats, and a method to calculate longitude at sea all emerged from prize competitions, according to Fiona Murray, a professor at the MIT Sloan School of Management.
But are prizes a good way to develop real-world solutions?
Here the evidence is shakier. The Virgin Earth Challenge, a $25 million prize sponsored by billionaire Richard Branson in 2007, failed to produce its objective of commercially viable CO2 removal technology, despite 10,000 entrants. Similarly, Google’s $30 million Lunar X-Prize failed to reach its moon landing after a decade.
In her book Inventing Ideas: Patents, Prizes, and the Knowledge Economy, Zorina Kahn analyzed 60,000 prize competitions over the past few centuries, and found that innovation prizes don’t typically result in scalable technologies that succeed in the marketplace. “The arbitrary nature of judging is a theme that reoccurs in all prize systems,” writes Kahn, a professor of economics at Bowdoin College and a research associate at the National Bureau of Economic Research.
Part of the problem is that “the best” in a competition is determined by the award’s administrator, rather than the market or society in general. “Even the most dedicated and knowledgeable panel are unlikely to be able to predict what will be the most appropriate technologies and how that will change over time,” Kahn writes. “Successful solutions are often associated with numerous incremental inventions and seemingly disparate discoveries rather than ‘THE best’ technology. The most efficient solution might be as simple as planting more trees or policies to prevent deforestation.”
All publicity is good publicity
The final product may not always be the point, and competitions that fail to produce the desired technology can still succeed at generating enthusiasm and ideas. At MIT, Murray researched the $10 million Progressive Insurance Automotive X-Prize in late 2009 to build a clean-energy passenger vehicle with a range equivalent to 100 miles per gallon. She found that, like most of today’s competitions, the prize was designed to “maximize effort, not efficiency.”
The competition attracted participants from diverse communities including race enthusiasts, startups, universities, large corporations, high schools, and even solo entrepreneurs. None led to a company like Tesla, but “if you’re not quite sure what the solution should look like and you want to focus attention on something,” says Murray, “then you actually don’t mind the fact that lots of people are turning up and coming with novel ideas.”
Scandinavian researchers arrived at a similar conclusion after studying such competitions in Finland. As a matter of innovation policy, the awards delivered “mediocre or modest” results, but they proved excellent at delivering something else: media coverage and credibility. That, ultimately, is what drove participants: “The motives to enter award competitions are largely non-monetary,” the paper argues.
Today, carbon capture and storage need both more attention and more scalable innovations. The technology has languished for decades as mega-projects, such as the $1 billion Petra Nova “clean coal” plant and the $7.5 billion Kemper Project in Mississippi, proved too costly or unwieldy. The number of such facilities fell from a high of 77 in 2010 to just 37 in 2017.
In the last four years, more than 30 new projects have been announced, according to the Energy Information Administration, which would triple today’s global CO2 capture capacity to about 130 million tons per year if constructed, less than 1% of what’s needed by mid-century. To scale up the industry, the price of capture carbon (around $600 per ton) must come way down, and hundreds of billions of dollars in new investment will be needed.
Musk’s prize-winner may not produce the next Tesla of carbon capture and storage. But it could inspire the attention and excitement of someone who does.