“Who will pay for this?” was the existential question at the heart of the climate debate in 2024, from COP29 to industry conferences. The durable carbon removal industry might be the clearest example of the climate finance challenge facing climate tech as a whole. And as we move into 2025, it’s increasingly apparent that we need to pull carbon dioxide out of the atmosphere to avoid the worst impacts of climate change. But, unlike other clean technologies, there is no CDR pre-existing market, and therefore no obvious funding mechanism.
Consider solar energy. Solar panels generate electricity and solar project developers sell into an existing electricity market. Reducing manufacturing costs and improving the efficiency of solar panels reduces the price of renewable electricity, displaces fossil energy on the grid, and results in lower emissions.
Carbon removal does not work like this. Carbon removed from the atmosphere is not a commodity like electricity that any individual firm necessarily wants or needs. Instead, this climate solution is more akin to a public good, like clean air — essential, yet not something that a private market naturally supports.
The voluntary carbon market (or VCM) attempts to bridge this gap between public goods and private firms. In the VCM, corporations buy carbon credits to offset their emissions as a means to meet their sustainability goals. But these purchases are by definition voluntary — and the VCM alone lacks sufficient demand-pull to bring CDR solutions to climate-relevant scale.
For carbon removal to meaningfully contribute to climate goals, we must look beyond the voluntary carbon market and embrace new demand drivers and policy frameworks. These should treat carbon removal as a public good, applying a “leave it better than you found it” ethic to our global atmospheric commons.
Compliance kicks in
The current assumption is that demand for carbon removal credits will shift from today’s voluntary markets to tomorrow’s government-mandated compliance markets, including the UN-managed carbon market created by Article 6 of the Paris Agreement.
To do that we will need to integrate carbon removal into broader carbon pricing mechanisms, like cap-and-trade systems, where governments set limits on emissions. In compliance markets, companies are legally required to reduce their emissions and pay for any excess — creating a stable, regulated demand. Assuming that happens in a timely fashion, carbon removal integrated into a compliance market is a powerful tool for decarbonization.
But voluntary and compliance markets together are still not enough — especially given how quickly an election can change a government’s willingness to support climate action. Even if these policies are enacted, compliance markets and carbon pricing policies will cannibalize voluntary demand. By design, demand from compliance markets will go down over time as the global economy decarbonizes.
That’s why it’s so important to expand our thinking: What can carbon removal truly be used for? How do we quantify its benefits — and who will pay for them?
Beyond carbon credits
It’s tough to shake the logic of carbon markets when we talk about carbon removal, even when we recognize the risks of overreliance on credits.
This is, in part, because we’ve borrowed heavily from the existing clean technology playbook where policy support drives down costs and accelerates adoption, allowing the new technology to launch into a pre-existing market and compete with incumbents. Policy kickstarts the process, then markets take over. With solar and batteries, for example, government funding for research, tax incentives, and market signals created a virtuous cycle.
Most carbon removal policy today follows this pattern: research, supply push, and demand pull to get to market. But carbon removal as a product or physical process doesn’t fit neatly into this mold. There is no market unless policy creates one.
If we stay firmly rooted in the carbon market paradigm — that is, if we don’t think about, develop language for, and seriously consider other types of demand drivers — we will fail to identify and utilize all possible opportunities to deploy carbon removal solutions at scale globally. And that failure won’t just impact corporate sustainability reports and legislative debates. The real costs will be borne by farmers whose crops fail because of drought or people who lose their homes in unprecedented floods, and everyone else on the frontlines of climate change.
A new wave of carbon removal opportunity
Where there is a challenge, there is also often an opportunity. In carbon removal, there is a wave of scientists and entrepreneurs building removal solutions that embed in existing industries, support decarbonization goals, and, crucially, valorize waste products. Forward-looking corporate buyers and philanthropists, who recognize the need to grow carbon removal demand, are supporting these early efforts.
For example, enhanced weathering is a promising form of durable carbon removal. Enhanced weathering on agricultural lands also has the benefit of increasing soil pH. And pH management and soil deacidification are a challenge impacting millions of acres of agricultural land in the U.S.
What if farmers were compensated, through existing USDA programs, to address soil acidification, improve soil health and crop yields, while also removing carbon from the atmosphere via enhanced weathering? This could sit alongside commercial activity in the voluntary carbon market today and become a stand-alone, scalable and cost-effective practice in its own right, as we build the evidence base over time.
By expanding our thinking beyond the current crediting paradigm, we can ask these kinds of questions and do the research to answer them. We can chart a path toward sustained, large-scale carbon removal that weaves seamlessly into existing industries and infrastructure. Only by doing this can we achieve the scale and political resiliency to use carbon removal as a tool for climate justice, and avoid the worst harms of warming.
Anu Khan is the founder and director of the Carbon Removal Standards Initiative (CRSI). Noah Planavsky is a professor in the Yale Center for Natural Carbon Capture and is Vice Chair of CRSI’s Advisory Board. The opinions represented in this contributed article are solely those of the authors, and do not reflect the views of Latitude Media or any of its staff.
