Big names in technology and consulting have just made a commitment of $925 million to purchase sequestered carbon between now and 2030. That pledge – a pledge Stripe, Alphabet, Meta, Shopify and McKinsey – represent a major investment in decarbonization technologies.
Their new initiative, called Frontier, should expand the reach of the still-nascent technology, while making it more accessible to other companies also looking to buy sequestered carbon as a way to offset some of the pollution from global warming. they produce.
There are already facilities that can filter this carbon dioxide from the air, as well as efforts to store carbon dioxide in rock formations or in the ocean once it has been captured. But the current ability to do so is minimal compared to what some climate experts say is necessary. In addition, the technology is still very expensive.
Frontier aims to reduce costs by increasing the demand for service. It will eventually act as a kind of intermediary between buyers who are willing to pay to reduce greenhouse gas emissions and suppliers who can do so for them. It would have to lay a lot of the foundation for this kind of market — from setting standards for screening decarbonization projects to figuring out some kind of system for issuing credits to companies that show how much carbon dioxide they paid to remove it from the atmosphere.
Such a market for decarbonization would have to proceed with caution to avoid some risks with similar markets for carbon offsets. There is a history of carbon offset projects that have virtually failed to sequester carbon dioxide over the long term, even with the claims of the companies that invested in them that they were essentially wiping out their carbon footprint.
Crucially, many experts who have called for more decarbonization assert that the primary goal is to offset pollution that is difficult to prevent. These “hard-to-mitigate” emissions typically come from heavy industries, such as cement and steel manufacturing, that cannot easily be converted to renewable energy. Decarbonization isn’t meant to be a jail-free exit ticket for companies that need to take major steps to reduce their pollution in the first place.
Frontier is wholly owned by Stripe, while the other companies provide seed funding. The new subsidiary builds on Stripe’s previous efforts to boost its decarbonization technologies. Stripe initially committed to spending $1 million a year to get carbon dioxide out of the air in 2019. The following year, the online payments platform began offering its customers an option to give away a portion of the money they earn from every sale of decarbonization projects. The contributions of these clients will also support the Frontier Initiative.