Return on Investments in Climate Technologies

    View Author May 2018
    Climate technologies have long been frowned upon as not being financially viable and as scientifically risky. Climate technologies aim to halt climate change, for example, by producing “negative emissions” by way of carbon dioxide reduction and capturing. This paradigm may have begun to shift: In their 2014 report on climate change, the Intergovernmental Panel on Climate Change (IPPC) found that almost all of the more than 100 scenarios it studied to keep the increase of the planet’s temperature under 2 degrees Celsius involved negative emissions.

    The United Nations Environmental Program stated in its 2017 annual Emissions Gap Report that, in order to achieve the goals of the Paris Agreement on Climate Change, carbon dioxide removal is likely a necessary step. In addition, two other developments will have a significant practical and economic effect: First, initiatives by the private sector investing in climate technologies have gained momentum. Second, the US Bipartisan Budget Act of 2018 significantly expands and enhances the tax credit under tax code Section 45Q. The tax credit incentivizes the capture and transport of carbon dioxide from an industrial source for use in enhanced oil recovery or for permanent storage in a geologic formation.