The best way to reduce CO2 emissions is to make the polluting industries pay at least four times as much for the quantity of these emissions as they do now. So says Steven Chu, the former Secretary of State for Energy of the United States, Nobel Prize winner and physicist.
The price for CO2 emissions is currently around 20 euros per ton. Far too low, says Chu. According to him, this should be at least 80 euros. Otherwise, there is no financial incentive for reducing CO2 emissions. It is also not attractive for companies to collect CO2, nor for processing companies to make a product out of it or to store it.
Chu made his views known during The Business Booster, the annual conference of the European investor InnoEnergy that was held in Paris last week. It focuses on innovative start-ups in the energy sector.
The former State Secretary for Energy in the Obama administration responded to the question posed by one of the participants in the congress, namely Robert Rosa from Climeworks. This is a company that is currently extracting CO2 from outdoor air and resells it to fruit and vegetable growers for their greenhouses. They also are storing CO2 in the ground in Iceland. In combination with the subsoil of basalt there, it then crystallizes and within a few years it turns into a type of white rock.
Get CO2 out of the air now
Rosa wanted to hear from Chu if it wasn’t better to focus on a technology that is already able to extract CO2 directly from air. As opposed to waiting until there is a technology that can be manufactured without CO2 emissions. After all, as long as this technology does not exist, large-scale industrial CO2 emissions will simply persist. The climate is suffering as a result, while you could help alleviate it right now. That’s a better strategy in his view.
Chu, (who told us himself that he is on the board of Inventys, a company that captures and recycles CO2), says that the current CO2 price is still far too low at the moment to be able to successfully steer in that direction. “As long as the world doesn’t raise the CO2 price, we’re stuck,” Chu says.
As much as 100 euros per ton
As much as 100 euros per ton is needed to be able to transform CO2 from outdoor air into rock in a cost-effective way, according to him.
In order to raise that price, the various trading bodies in the world have to make agreements about the costs of CO2 emissions, Chu says. “My dream is that the EU and China will sit down together at the negotiating table and make agreements about this. The best thing to do is to raise the price of CO2 from 20 to around 80 euros per ton over a period of 10 to 15 years. This will allow industry enough time to prepare for this.”
‘Dream of CO2 agreements between the EU and China’
This means that the industry will have to adapt its manufacturing processes and emit less CO2. Or else anticipate a higher price per product because of the extra tax that is charged for CO2 emissions. Chu’ s idea is to estimate the amount of energy used for the production of goods at the borders where they enter the country. The extra tax based on this estimate must be reinvested into the community.