Sen. John Barrasso (R-WY) has introduced a bill to create prizes for carbon sequestration:
This is how it would work. There would be four different levels of prizes. The first level award would go to the public or private entity that could first demonstrate a design for a successful technology that could remove and permanently sequester greenhouse gases. Second, there would be a prize for a lab scale demonstration project of the technology that accomplishes the same thing. Third, there would be an award for demonstrating the technology to remove and permanently sequester greenhouse gases that is operational at a larger, working model scale. Finally, there would be an award for whoever could demonstrate the technology to remove and permanently sequester greenhouse gases on a commercially viable scale.
It sounds like many important details would be decided by a federal commission. The prizes could have many of the promises and drawbacks of Virgin Earth Challenge.
The first three levels of the prizes appear to create incentives to create designs with little regard for commercial feasibility. If those prizes are large, they might end up rewarding technologies that are too expensive to be worth using. Small prizes might have little trouble with this due to inventors not wanting to spend much money to win the prizes, but I’d still have concerns about inventors paying little attention to reliability and maintenance costs. The fourth level appears more promising.
Bureaucrats are likely to put more effort into clarifying prize rules that the Virgin Earth group did. But it’s unclear whether any approaches that a government agency is likely to recommend will do a decent job of translating the “commercially viable” goal into a clear enough set of rules that inventors will be able to predict how the prizes will be awarded.
My advice for the commission, should it be created, is that it tie the prizes to actual amounts of carbon removed from the atmosphere over some pre-specified period, or to estimates of those amounts derived from a prediction market.
(HT Jim Manzi).