Stripe, Alphabet, Shopify, Meta and McKinsey Sustainability Commit $925 Million for Carbon Removal
Some of the world’s largest companies are banding together to fight climate change. Stripe, Alphabet, Shopify, Meta and McKinsey Sustainability, announced they are committing an initial $925 million to accelerate the development of technological carbon removal. To that end, the companies created Frontier, an advanced market commitment (AMC) to accelerate the development of carbon removal technologies, according to an announcement.
The goal is to send a strong demand signal to researchers, entrepreneurs, and investors that there is a growing market for these technologies, according to Frontier’s website.
“In practice, its team of technical and commercial experts facilitates purchases from high-potential carbon removal companies on behalf of buyers. Over time, we plan to open Frontier to new buyers to further increase demand and spur new supply,” Frontier said.
It added that the concept of an AMC is borrowed from vaccine development and was piloted a decade ago.
While the market dynamics of carbon removal and vaccines are not identical, they face similar challenges: uncertainty about long-term demand and unproven technologies, Frontier added.
“For the first time, we’re applying this model to carbon removal at scale,” Stripe tweeted.
Frontier said that it doesn’t know yet how many tons of carbon removal $925 million will buy, but it will target technologies that are high quality and have the greatest long-term potential, rather than what is cheap today.
The United Nation’s Intergovernmental Panel on Climate Change (IPCC), in its report released April 4, wrote that Carbon Dioxide Removal (CDR) “is necessary to achieve net zero CO2 and GHG emissions both globally and nationally, counterbalancing ‘hard-to-abate’ residual emissions. CDR is also an essential element of scenarios that limit warming to 1.5°C or likely below 2°C by 2100, regardless of whether global 35 emissions reach near zero, net zero or net negative levels.”
“We are at a crossroads. The decisions we make now can secure a livable future. We have the tools and know-how required to limit warming,” IPCC Chair Hoesung Lee said in a press release on April 4. “I am encouraged by climate action being taken in many countries. There are policies, regulations and market instruments that are proving effective. If these are scaled up and applied more widely and equitably, they can support deep emissions reductions and stimulate innovation.”
Frontier is run by a team of technical and commercial experts, led by Stripe head of climate, Nan Ransohoff.
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