The potential role of state and local governments to drive the scale-up of carbon dioxide removal

As the Intergovernmental Panel on Climate Change concluded in its Sixth Assessment Report, deployment of carbon dioxide removal will be "unavoidable" if we are to achieve net-zero targets and the temperature objectives of the Paris Agreement by 2050. Estimates for exactly how much CDR is needed span a spectrum, anywhere up to 7-9 gigatons annually, with recent estimates at 4 gigatons. Some studies project the need for as much as 20 gigatons in the latter half of this century. The United States, as the historically largest emitter of carbon dioxide, has an important equitable responsibility to play in the buildout of this sector. It's been estimated that the United States will need to remove approximately one gigaton of carbon dioxide annually from the atmosphere by 2050 to meet its fair share of global net-zero objectives. This could translate into an obligation to cumulatively remove hundreds of gigatons by the end of the century.

A retreating federal government

Achievement of these daunting scales of removals in this century faces formidable headwinds, including in the United States. Reports have emphasised that government support for the CDR sector is critical in its early stages of development. This includes targeted subsidies and procurement programmes that can ultimately drive down costs through scaling and learning by doing, as well as through research and development programmes and the establishment of sound verification standards. But while the Biden administration was at the global forefront in supporting the buildout of CDR capacity, the Trump administration's support has been far more tepid. Early in its second term, the administration fired most employees in the DOE's Office of Fossil Energy and Carbon Management's Carbon Dioxide Removal Program, as well as many marine carbon dioxide removal experts at the National Oceanic and Atmospheric Administration. Moreover, the administration substantially scaled back government funding of direct air capture demonstration projects. More broadly, the administration's climate deregulatory actions may also undermine demand for CDR. Following the Trump administration's lead, several billionaire-backed philanthropies have also stepped away from support for climate interventions, including CDR.

A market too small, too concentrated

So, what other actors might help us get to the mountaintop? We cannot realistically expect the voluntary carbon markets, predominated by corporate purchasers, to supply the requisite demand to scale CDR to the multi-gigaton level. This market is currently minuscule, pegged at approximately 44 million tons of contracted removals to date. Moreover, Microsoft, which has purchased approximately 80% of the contracted cumulative volume of removals to date, recently informed several suppliers that it may slow the pace of CDR purchases. Even before this announcement was made, analysis indicated that by 2030, buyers may only be annually retiring (withdrawing credits from the market) 30-50 million tons of carbon removal from the voluntary market. This would represent less than 5% of the removals needed in 2030 to meet IPCC scenarios consistent with holding temperatures to 1.5°C.

All of these signals underscore the need to develop new mechanisms to drive the scaling of CDR. This is especially critical in the sector's early stages of development, where companies face the "valley of death," the stage at which an absence of funding/demand means that technically feasible projects may not advance beyond the concept stage. This could imperil the sector's build-out and prevent it from fulfilling its role in mitigating serious climate impacts in the middle of this century and beyond. We must also acknowledge the need to ensure that massive scaling of CDR is carried out in a manner that is just and equitable and does not repeat many of the past injustices of industrial development.

Where subnational governments come in

We believe that sub-national government entities, including states and local governments, can play a unique and critical role in scaling CDR. Indeed, Frontier Climate, an advance market commitment for CDR backed by Stripe, Google, Salesforce, Shopify, H&M and now Anthropic, recently announced another $915M of funding, noting that every one of its new deals will "require a clear line of sight to robust, long-term demand", the kind of demand that government actors need to back, like "compliance markets, industrial regulation, or direct government procurement."

To date, only a few such initiatives have been implemented. At the state level, this includes California's Climate Crisis Act, which establishes a quantitative target of seven megatons of carbon removal by 2030 and 75 megatons by 2045, 2024 legislation in Massachusetts, which calls for assessing the potential for terrestrial and marine carbon dioxide removal, and Colorado's Carbon Management Roadmap, which seeks to assess the potential for carbon removal in the state and means to facilitate scaling.

While "cities and carbon dioxide removal haven't been mentioned that often together," cities are in fact responsible for approximately 70% of annual carbon dioxide emissions. That said, a smattering of examples in the United States offer initial ideas about what city leadership in CDR could look like. The 4Corners Carbon Removal Coalition is a network of six local governments in Colorado, Arizona, Utah, and New Mexico that provides support for carbon removal projects through its Catalytic Grants Campaign. In 2025, the city of Minneapolis also became the first city in the country to open a municipally-owned biochar facility. A recent report concluded that cities worldwide could effectuate at least a gigaton of carbon dioxide removal annually by 2050.

What subnational leadership could look like

Subnational government actors have several potential roles to play in ensuring that carbon dioxide removal reaches the requisite scale to be fit for purpose. But sub-national governments are particularly well-positioned to lead not just in scaling CDR but also in ensuring that scaling occurs in just and socially beneficial ways.

These are some of the opportunities subnational governments have for leading on the responsible scaling of CDR:

• CDR's key challenges and potential roadblocks are issues of legitimacy and social backlash, and those are all issues that will play out at hyper-local levels. A big part of scaling CDR is ensuring that carbon removal projects are responsive to their specific circumstances, including unique geographic, economic, and political conditions. States and local governments can develop policies to do so, jumpstarting the sector. They can also create models that other subnational entities can adopt, or even serve as laboratories for federal policy, as has been the case in the past for other environmental policies and initiatives.
  
  
• Cohesive planning by government agencies could help society move away from ad hoc projects (what we currently do) to independent, systematic, place-based assessment of what kinds of CDR could work well in a region, and to anticipate potential benefits, risks, and how those would cumulatively scale. Governments can lead on broad conversations and discussions with constituencies about what they want to see happen in their regions.
  
  
• Sub-national governments can also lead on producing CDR, which is already happening at early levels, as discussed above. This kind of government-led procurement can set a high bar for the quality of CDR, with knock-on effects for other funders, by mandating early and meaningful engagement, requiring community benefit agreements and labour standards, and setting conditions under which scale-up is not permitted.
  
  
• The scaling of many CDR approaches will depend heavily on the rate and magnitude of achievable cost reductions over the next decade. State and local government CDR procurement programmes could foster early-stage niche discovery and penetration. This can generate revenue in the initial stages of a company/sector's development, and drive additional market opportunities through cost reductions associated with scaling and knowledge spillovers from first-of-a-kind products. In the longer term, demonstrated and assured public demand can help drive structural market transformation, including scaling supply chains, developing critical infrastructure for the transportation and storage of carbon dioxide, workforce development, and the crowding in of private investment.
  
  
• In many cases, states are the primary regulatory entities for critical infrastructure associated with carbon dioxide removal approaches, and in many cases, can be nimbler than the federal government in developing innovative policies to accelerate permitting or develop innovative regulatory approaches.
  
  
• A focus on the potential role of cities in carbon removal policy could also lead to the development of alternative business or governance models, like co-operatives, employee-owned enterprises, and Indigenous co-management models. Carbon dioxide can be conceived of as a waste product, and cities have centuries of experience in waste management, including infrastructure construction, financing mechanisms, and effective regulation of private entities.

A vision worth investing in

What we have presented here is an ambitious vision: it's a map of the possibilities for motivated governments seeking to be key leaders at the forefront of climate innovation and action. These governments have the longevity needed to act as long-term stewards of CDR, something that is vitally important, given that CDR requires ongoing monitoring for hundreds of years if not longer. These governments also have the experience to know how to manage CDR, given that they already manage many comparable or coupled systems, things that require long time horizons, public risks, and complexity, like water, wastewater, energy, and hazardous materials. We should be looking to these actors more keenly as we think about the future of CDR.

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