It is hard to ignore the noise currently being made about climate change. Be it Extinction Rebellion, Greta Thurnberg, or Michael Bloomberg, it is certainly a topic that has made its way into the public consciousness this year and let’s hope that it stays there.
The way I often engage with climate change is through the work that I do with sustainable technologies. Our decarbonisation practice is focused on helping to make potential solutions to climate change into a commercial reality.
And therein lies the rub. We can shout, we can close bridges, and we can fill our TV screens with heart-wrenching images of stranded polar bears. But, at least in my experience, there are few large-scale industrial carbon emitters who are willing to pay for the technologies that will halt the ticking CO2 timebomb that we’ve all been talking about.
I often hear people saying that there aren’t currently any viable solutions to our predicament, or that our technological saviour is yet to be invented. But, actually, there are a lot of technologies already out there, it’s just that people don’t want to pay for them.
While we are starting to see the introduction of serious financial incentives to capture CO2 in places such as California and Ontario, I am a big believer that enduring solutions must be able to stand on their own economic feet. This is not dissimilar to the way I felt about renewable generation technologies being propped up by feed-in-tariffs. While financial incentives can form a critical part of getting a new type of solution or technology off the ground, it should not be the crutch that enables long-term economic viability.
What I have come to realise recently is that you don’t necessarily have to get CO2 capture or utilisation to pay for itself directly. It is this line of thinking which helped me to develop the notion of “borrowed economics”.
I am currently acting as the Strategy Director for a company which uses waste CO2 to carbonate industrial thermal residues (incineration ashes, steel slags, cement dusts) and generate a mineralised product for use as a building material. Although the implementation of the European Emissions Trading System (ETS) can enable a small cost saving through the diversion and utilization of CO2 in this process, CO2 capture is not in itself a profitable activity in this instance. Instead, a significant economic benefit is achieved by diverting thermal residues from landfill, often eradicating disposal costs of up to £120/tonne. Every pound saved on the avoidance of landfill can be attributed to a quantity of CO2 used, allowing us to express permanent CO2 capture as a profitable activity. This is how we borrow economics.
The question for me is can we do this by design? Can innovators identify economically attractive problems to solve that also result in the reduction of carbon emissions? Ideally, governments, regulators, investors, and industrial corporates will soon start to place a monetary value on CO2 capture or emissions reduction. Until they do, we might need to get a little creative with our economics.