Like fiscal equivalents, carbon budgets come in all shapes and sizes. The Intergovernmental Panel on Climate Change produces countless iterations of global carbon budgets to inform atmospheric models and projected planetary conditions. The United Kingdom’s Climate Change Committee sets nationwide carbon budgets on a five-year basis, intended to gradually decrease national emissions to net zero by 2050. Even individuals could in theory manage a personal carbon allowance (we, admittedly, do not).
At the most basic level, these budgets operate as inverted checking accounts. Deposits of carbon dioxide raise the balance and in turn contribute to planetary warming. Replacing a coal-fired power plant with solar panels and battery storage helps to maintain the budget by avoiding deposits from burning coal. Slowing the rate of deposits by accelerating the deployment of renewable energy technologies, sustainable fuels, and alternative industrial processes is essential to maintain future carbon budgets, but correcting for years of run-away deposits will require significant withdrawals.
As industries and individuals continue to spend well beyond their means, carbon budgetors have little choice but to turn to untested tools and tech to make ends meet. Technology solutionism continues to divide the climate community, and carbon removal technologies are at the core of the debate. Both opponents and proponents of these technologies present valid arguments, and these systems should by no means be used as an excuse to maintain the status quo. It is clear, however, that the world will need novel interventions to correct decades of bad budgeting.
The Death of DAC?
Carbon drawdown technologies have been playing larger roles in recent carbon budgets. In 2021, the International Energy Agency’s flagship World Energy Outlook projected that direct air capture (DAC) technologies—which sequester CO2 directly from the atmosphere—would remove 633 million tons of CO2 (Mt-CO2) annually by 2050 under a net-zero scenario. Three years and 112 billion tons of CO2 emissions later, the 2024 World Energy Outlook upped DAC’s projected 2050 capacity to 780 Mt-CO2 to reach net zero. DAC’s rising role in carbon budgets has led to greater attention from government funders and corporate financiers alike, but the technology remains unproven at scale and faces a bumpy road to commercial deployment.
Three recent cancellations and retreats represent core uncertainties that will continue to plague DAC throughout its commercialization process. In September, CarbonCapture—a leading US DAC firm backed by Amazon equity and federal funding—announced that it was scrapping its plans for a first-of-a-kind DAC facility in Wyoming. With a planned annual removal capacity of 5 Mt-CO2, “Project Bison” would have dwarfed any operational DAC facility and single-handedly increased the industry’s total installed capacity 100-fold.
Its size, however, may have contributed to its downfall, as the project was unable to secure sufficient clean firm power. CarbonCapture was left with two options: supply its carbon removal technology with carbon-spewing fossil-fueled power or shut down. In an age of renewed electricity demand growth in the US and worldwide, DAC technologies will struggle to compete for access to clean electrons—forcing CarbonCapture’s predicament on other DAC developers.
What DAC lacked in electrons, it seemed to make up for in federal funding in the United States. Under the Biden administration’s Infrastructure Investment and Jobs Act, the Department of Energy announced $3.5 billion worth of funding to establish at least four Regional Direct Air Capture Hubs across the country. DOE’s Office of Clean Energy Demonstrations (OCED) awarded the first $1.2 billion to two hub proposals in Texas and Louisiana.
However, the Trump administration paused most outstanding DOE funding and reportedly gutted OCED, losing 77 percent of its staff. Such federal uncertainty has already eroded DAC’s viability. Heirloom, a capture firm pursuing a calcium-hydroxide (lime-based) removal strategy, cancelled one facility and lost several staff members, despite having completed a $150 million investment round in December with buy-in from Microsoft and United Airlines. A former employee cited uncertainty around the future of the hubs as the reason for some of the layoffs.
Congress’ “Big Beautiful Bill” forebodes further downturns for the DAC industry as the future of the 45Q “Carbon Oxide Sequestration Credit” hangs in the balance. DAC facilities were made eligible to claim 45Q tax credits in 2018 and allowed further transferability freedoms under the Inflation Reduction Act of 2022. As the scheme currently stands, credits for DAC firms are priced at a premium—nearly double the value of a ton of removed carbon from other capture sources—in an attempt to support domestic development of the nascent technology.
The House of Representatives’ reconciliation budget—now up for review in the Senate—would terminatetransferability of 45Q credits as early as 2027 and subject the industry to greater scrutiny over the involvement of foreign entities of concern in the supply chain. 45Q may have fared better than most credits in the House bill, but attacking transferability and raising FEOC barriers could kneecap the fledgling DAC industry in the United States.
Projects Outside America
Fortunately, the DAC dream was born beyond America’s borders, in countries with more stable political environments and climate objectives. Iceland has long been the darling of DAC, with the greatest installed capacity worldwide thanks to Climeworks’ Orca and Mammoth facilities. Skirting the southwest edge of Iceland’s coastline, these projects advertise a combined removal potential of nearly 40,000 tons of CO2 per year. Orca and Mammoth draw energy from nearby geothermal power plants and sport the quintessential Nordic industrial-chic aesthetic. They served as global anchors of DAC ambition, attracting US Senate delegations and blue-chip partnerships since Orca’s commissioning in 2021.
Then, Climework’s bubble burst. Reporting based on corporate filings revealed the two operational facilities have not captured enough carbon to offset even their own emissions. Project delays, cost overruns, and corporate shortfalls have plagued DAC developments in Iceland since 2023. Climeworks AG—Orca and Mammoth’s Swiss parent company—recently laid off 106 employees, citing difficulties in Iceland and the United States, where Climeworks plans to build a 1 Mt-CO2 capture facility as part of the Louisiana DAC hub.
Core Challenges
The developer stories touched on—CarbonCapture, Heirloom, and Climeworks—are representative of three core challenges to DAC deployment. CarbonCapture’s Project Bison exposed the dangers of ambition exceeding energy access. Heirloom is one of many DAC developers vulnerable to a shifting policy environment and funding reversals. Climeworks, the industry leader, revealed the lingering limitations of DAC technologies. Underpinning all of those vulnerabilities is DAC’s fundamental cost challenge.
Climeworks raises funds primarily through the sale of high-integrity carbon credits, which it sells to customers at around $1,000 per ton of CO2 captured. Thus far, Climeworks has taken around 380,000 tons of orders from firms like BCG and Morgan Stanley. Presumably, the vast majority of those orders remain unfilled. If the integrity of Climework’s credits is called into question, customers will turn to other offset opportunities, particularly given that the going price of carbon in the European Union’s Emissions Trading System is only $86, as of June 2025. In the United States, with no set carbon price, DAC’s financing structure is even more abstract and reliant on all-too-uncertain government support.
Ultimately, DAC—and carbon removal technologies like point source carbon capture—are far from sure bets, yet their role in carbon budgets will only gain in importance as the world continues to emit record quantities of carbon dioxide. Consistent government support and sustained industry buy-in are essential to supporting the development of DAC technologies worldwide. With consistency in short supply, it is worth considering other strategies that could ease the burden on carbon removal through atmospheric alterations.
An Alternative? Stratospheric Aerosol Injections
As carbon removal firms increasingly find themselves in jeopardy, what other strategies do the technological solutionists have to offer in the fight against climate change? The list of controversial interventions is long. From space-based reflectors to marine cloud brightening, a series of solar geoengineering technologies have been put forward as potential adaptation tactics. But, by far the most controversial approach of them all is stratospheric aerosol injections (SAI).
Once considered science fiction, SAI is a solar radiation management technique that aims to limit the amount of sunlight hitting the Earth by injecting reflective particles into the stratosphere. Conceptually inspired by volcanic eruptions, such as the Mount Pinatubo eruption in 1999, the sulfuric acid aerosols delivered by airplanes would reflect light back into space, ultimately reducing global temperatures. When Mount Pinatubo erupted, it released enough particulate matter to reduce temperatures by 0.5 degrees Celsius and, through SAI, scientists hope to artificially induce a similar cooling effect.
The United Kingdom appears to be leading the most aggressive research efforts into the technology. In April, the UK’s Advanced Research and Invention Agency (ARIA) announced a £56.8 million research initiative to further investigate geoengineering. From communication on climate cooling to global computer modeling, from arctic ecological impact assessments to ethical governance strategies, the 21 funded projects seek to address many of the fundamental concerns surrounding the technology. What makes the initiative so momentous are the five proposed small-scale outdoor experiments. Historically, geoengineering field tests have encountered massive resistance and, often, collapsed under public pressure. For instance, Harvard’s long-planned Stratospheric Controlled Perturbation Experiment (SCoPEx) was halted in 2024 after being met with community opposition.
Despite traditional discontent, roughly £24.5 million (43 percent) of ARIA’s budget is dedicated to the five controlled experiments, indicating a substantial desire to take geoengineering beyond the lab. The agency’s voiced concerns about passing tipping points—thresholds that would fundamentally and irreversibly disrupt the climate—is cited as justification for the real-world tests and reflects a harsh reality; we may run out of alternative options to prevent rapid decline.
Situated in the broader context of DAC’s underperformance, it is becoming increasingly important to empirically determine what role solar geoengineering can play in climate adaptation. If we do not test the technology now, it is likely that, as climate conditions deteriorate, we will assume greater risks when searching for a solution.
By no means is SAI a “get out of jail free” card, nor does it come without substantial risk. History warns us that instances of environmental manipulation have yielded unintentional consequences. For instance, the 1935 introduction of cane toads into Australia—initially to address the beetle population—has had significant ecological knock-off effects. Undoubtedly, the consequences of stratospheric aerosol injections could far eclipse those posed by an invasive amphibian. By its very nature, the interconnectivity of Earth systems means that any at-scale deployment will carry international implications. However, as it increasingly looks like the question of geoengineering is becoming a when, not if, neglecting early research would be a catastrophic mistake.
Creditor of Last Resort
The numbers in our carbon balance budget are not adding up and, sooner or later, we will have to pay up. The nascent carbon capture industry was hailed as a solution capable of pulling our climate ledgers from deep in the red, but the budgetary and technological challenges faced by CarbonCapture’s Project Bison, Heirloom, and Climeworks, indicate that they are far from the bailout providers we were promised.
However, there is no way to say with absolute confidence that DAC will fail in its entirety. Pressures from governments, investors, and a rapidly warming world could catapult firms into an era of rapid innovation, but we likely need more time to scale. Solar geoengineering strategies could be that buffer and, through artificial cooling, provide more time to decarbonize.
Support from the British government into diverse scientific, ethical, and governance projects indicates a clear appetite for novel solutions. Yet, it would be just as naive to characterize solar geoengineering as a white knight, as it was to put all our chips on DAC. Techno-solutionism is appealing and can be blindly contagious, but the history of unrealized promises—from failed battery rollouts to overpromised DAC capacity—suggests that we must approach panacea projects with caution.
Our emissions tab is growing and neither carbon capture, nor stratospheric aerosol injections will be our lone budgetary firefighter. Indeed, traditional mitigation activities such as decarbonizing transportation, agriculture, and heavy industry must be the linchpin of our strategies to combat climate change. Nevertheless, it is a worthwhile endeavor to research these interventions alongside mitigation efforts because they may, unfortunately, become a creditor of last resort.
Emily Hardy co-writes IPQ’s CARBON CRITICAL column and is a master’s student at the University of Oxford. She was a James C. Gaither Junior Fellow in the Sustainability, Climate, and Geopolitics Program at the Carnegie Endowment for International Peace.
Dan Helmeci co-writes IPQ’s CARBON CRITICAL column. He is a researcher and former James C. Gaither Junior Fellow in the Sustainability, Climate, and Geopolitics Program at the Carnegie Endowment for International Peace.
