In the quest to achieve net-zero emissions, direct air capture (DAC) technology stands as a promising yet costly solution. A recent study published in the journal “Future of Earth” (formerly known as ‘Earth’s Future’) sheds light on how different policy instruments could shape the future of DAC deployment in the U.S. energy system. The research, led by Franklyn Kanyako from the School for Environment and Sustainability at the University of Michigan, offers a nuanced look at the economic trade-offs involved in scaling up this critical technology.
DAC involves capturing carbon dioxide (CO2) directly from the atmosphere, a process that could play a pivotal role in mitigating climate change. However, the high costs associated with DAC have been a significant barrier to its widespread adoption. Kanyako and his team set out to evaluate how different policy approaches could influence the cost reduction trajectory of DAC technologies.
The study integrates energy system optimization and learning curve models to assess the impact of three policy instruments: incremental deployment, accelerated deployment, and R&D-driven innovation. The findings reveal that while incremental deployment—gradually increasing DAC capacity over time—requires substantial investment, R&D-driven innovation emerges as a more cost-effective strategy for reducing costs.
“Incremental deployment demands significant learning investment,” Kanyako explains. “Under a baseline 8% learning rate, it may require up to $998 billion to reduce costs from $1,154 to $400 per ton of CO2.” In contrast, accelerated deployment support could save approximately $7 billion on that investment. However, R&D support stands out as the most economical option, achieving equivalent cost reductions at less than half the investment of incremental deployment.
The effectiveness of R&D intervention, however, varies with learning rates and R&D breakthroughs. “R&D yields net benefits in all cases except at extremely low breakthroughs (5%) and very high learning rates (20%), where they are slightly more expensive,” Kanyako notes. “For learning rates below 20%, R&D provides net benefits even at minimal breakthroughs.”
These findings underscore the need for a balanced policy strategy that combines near-term deployment incentives with long-term innovation investments. For the energy sector, this research highlights the potential for significant cost savings and accelerated deployment of DAC technologies, which could have profound commercial implications. As the world races to decarbonize, the insights from this study could shape future policy decisions and investment strategies, ensuring that DAC becomes a viable and cost-effective tool in the fight against climate change.
The study’s publication in “Future of Earth” marks an important contribution to the ongoing dialogue about the role of DAC in achieving net-zero emissions. By providing a detailed analysis of the economic and policy landscape, Kanyako and his team offer a roadmap for stakeholders to navigate the complexities of scaling up this critical technology. As the energy sector continues to evolve, the insights from this research will be invaluable in guiding the development and deployment of DAC technologies, ultimately contributing to a more sustainable and resilient energy future.