What is carbon capture? Eric Toone, investor at Gates’ firm, explains

Eric Toone is a technical lead investor for Bill Gates‘ climate tech investment firm, Breakthrough Energy Ventures. He’s one of two people who has to sign off on any deal for it to get funded, and he has signed off on five investments in carbon capture technology, four of which have been publicly announced.

Carbon dioxide from burning fossil fuels is a primary source of human-caused climate change. Carbon capture is a set of methods — some time-tested, some experimental — for reducing carbon dioxide emissions either by removing them at the source or from the atmosphere. (The term “carbon” is often used as shorthand for carbon dioxide, CO2, in discussions about capture and sequestration technology.)

Toone understands the arguments against carbon capture technology, but he’s optimistic anyway.

One big fear is that carbon capture technology presents a “moral hazard,” he told CNBC in a video conversation. If carbon capture technology becomes cost effective, then companies might not decarbonize their operations — they’ll just continue emitting and then pulling the carbon they emitted out of the atmosphere, effectively treading water in the emissions race.

Instead, critics say, companies need to focus on decarbonizing their operations by using renewable energy and increasing energy efficiencies.

Toone thinks this is a false dichotomy.

“It needs to be all of the above,” Toone told CNBC.

That’s also what the most recent report from the United Nation’s Intergovernmental Panel on Climate Change says.

Carbon dioxide removal is “necessary” for “counterbalancing ‘hard-to-abate’ residual emissions” and it “is also an essential element 34 of scenarios that limit warming to 1.5°C or likely below 2°C by 2100,” the technical summary of the report says.

For a technology to scale, however, there has to be demand.

It’s easy to see the economic demand for lower-carbon alternatives to existing products. Wind and solar can be cheaper than fossil fuels for generating electricity, electric vehicles can eliminate expensive trips to the gas station, and improvements to industrial processes and building efficiency save not only energy but money.

So who is going to pay for carbon dioxide removal, and why?

“That’s the $64,000 question,” Toone told CNBC.

Right now, the carbon capture market is voluntary, meaning companies participate if they choose, not out of any enforced federal requirements or regulations. That market has seen some green shoots lately. For example, in mid-April, the online payments-technology provider Stripe teamed up with several other tech companies, including Google parent Alphabet and Facebook parent Meta, to commit nearly $1 billion to spur the…