Venture Investment in Carbon Dioxide Removal Technologies: Current State and Outlook

Egor M. Muravev and Alexander V. Chernokulsky

Chapter 11 in Sustainable Investing:Problems and Solutions, 2024, pp 305-320 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This paper examines venture investments in Carbon Dioxide Removal (CDR) technologies. It analyzes the main trends, challenges, and opportunities that exist in this sector, with a focus on three key technologies: Bioenergy with Carbon Capture and Storage (BECCS), Direct Air Carbon Capture and Storage, and Enhanced Weathering (EW). According to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC), CDR is an integral component in scenarios aiming to limit warming to 2°C or below by 2100. While “traditional” or “conventional” CDR methods, based on the CO2 uptake capacity of forests and soils, remain the most widely used, there are limitations to their scalability. This underscores the importance of developing and implementing new CDR methods, many of which are still at a low level of technological maturity. In this context, venture investments often play a crucial role in the successful development and commercial application of technologies in the early stages due to a high tolerance for risk and a long-term investment horizon.

Keywords: Sustainable Investing; Impact Investing; Corporate Social Responsibility; Materiality; Externalities; Sustainability; ESG; ESG Funds; ESG Factors; ESG Scores; SASB; SDG; DEI; Private Equity; General Partners; Active Ownership; Investment Stewardship; Machine Learning; Natural Language Processing; Large Language Models; Transition Economy; Climate Risk; Net-zero Investing; Divestment; Greenhouse Gas Emissions; Scope 3 Emissions; Modern Portfolio Theory; Venture Investments; Carbon Dioxide Removal; Carbon Credits; Fuel Production; Portfolio Management; Market Sentiment; Factor Investing; Portfolio Optimization; Post-investment Management; Digital Transformation; Fixed Income; Portfolio Performance Measures (search for similar items in EconPapers)
Date: 2024
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