Like many companies, the payment processing company Stripe is trying to eliminate its emissions. For the emissions it can’t find ways to mitigate, it buys carbon offsets to help reach its goal. But the company recently announced that it would take the more radical step to start also investing in negative emissions—like direct air capture plants that suck CO2 from the atmosphere so that it can be stored underground.
“We were thinking, how could we and other companies have the most possible impact?” says Christian Anderson, head of merchant intelligence at Stripe. “And one area of increased impact that we saw was to look further down the technology learning curve at technologies that climate science tells us are likely to be very important.”
For the world to limit global warming to 1.5 degrees or 2 degrees Celsius, every scenario from the UN’s Intergovernmental Panel on Climate Change includes “negative emissions” as part of the solution. One recent report from an independent research group estimated that we’ll need to pull as much as 1,850 million metric tons of CO2 from the air each year to reach the widely accepted goal of net-zero emissions by midcentury; shifting to renewable energy and other approaches like reforestation aren’t enough on their own. Negative emissions tech exists but is in a nascent stage—and paying for a ton of CO2 from a direct air capture company can be 100 times more expensive than paying for a simple carbon offset from, say, a tree-planting project.
Stripe will continue to buy carbon offsets, but now plans to begin paying for negative emissions at whatever price is necessary; it plans to spend at least twice as much on the program as it does on offsets, at a minimum commitment of $1 million. The money may go to any of a number of technologies in the space, such as enhanced weathering, a process that speeds up the natural process of carbon sequestration in rocks. For an industry like direct air capture, where new plants are in the earliest stages of operation, this type of commitment could make a material difference.
“This is really essential right now because what is missing is a customer for early negative emissions projects. I think there’s good academic analysis that says, if you start building negative emissions projects, they will come down in costs,” says Noah Deich, executive director of Carbon180, a climate-focused nonprofit. “The collective action problem is everyone wants to wait until somebody else has built the first couple of projects, so the one that they buy is cheaper. What Stripe is doing is just saying, nope, we’re going to be a leader. We are going to potentially pay more on a dollar-per-ton basis for early projects. But we know that this is the way that technology costs come down in the future.” The same thing, he says, has happened for other critical technology such as solar power.
The million-dollar commitment is significant, Deich says, but the biggest role that Stripe can play is convincing other companies to follow suit; Stripe says that it is already talking to others in the tech industry. “If they could pool the buying resources of companies that understand the importance of negative emissions in meeting climate goals, they could pool together tens if not hundreds of million of dollars per year and use that funding to really drive down the cost of the technology that can achieve negative emissions, much more quickly than they can do alone,” Deich says. “I think everybody would benefit from that.”