More than 1000 big companies have pledged to eliminate their carbon emissions over the next few decades. As part of those efforts, more corporations are starting to pay for carbon dioxide removal. This year, Microsoft, Google and British Airways were among the companies that committed a total of $US1.6 billion ($2.5 billion) to purchase removal credits.

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That figure was up from less than $US1 million in 2019, according to CDR.fyi, a website that tracks the carbon dioxide removal industry. Next year, industry executives believe companies could spend up to $US10 billion on such purchases. In a recent report, McKinsey estimated the market could be worth as much as $US1.2 trillion by 2050.

While huge sums of money are being dedicated to the nascent field, these projects will not have a meaningful effect on global temperatures anytime soon.

There are a few dozen facilities operational today, including ones in Iceland and California. But the biggest of these capture only a sliver of the greenhouse gases humans produce in one day. Even if hundreds more such plants were built, they would not come close to counteracting even 1 per cent of annual carbon dioxide emissions.

“Let’s not pretend that it’s going to become available within the time frame we need to reduce emissions,” said former vice president Al Gore, a co-founder of Climate Trace, which maps global greenhouse gas emissions.

Last year, a United Nations panel cast significant doubt on the industry’s ability to make a difference. “Engineering-based removal activities are technologically and economically unproven, especially at scale, and pose unknown environmental and social risks,” it said.

Instead, many scientists and activists say the most effective way to combat global warming is to rapidly phase out oil, gas and coal, the burning of which is heating the planet.

“We need to obey the first law of holes,” Gore said. “When you’re in one, stop digging.”

Carbon dioxide removal is the most developed form of what is known as geoengineering, a broad set of speculative technologies designed to manipulate natural systems to cool the planet. In the past several years, as climate change has worsened, such ideas have moved from the stuff of science fiction into the mainstream.

But it is carbon dioxide removal that is attracting the big money.

Investors believe that, while the impact on temperatures may be negligible in the short term, the industry will start to make a difference as global emissions fall and the technology becomes more powerful.

And decades from now, even if the world is able to completely eliminate all new greenhouse gas emissions, many experts, including the Intergovernmental Panel on Climate Change, a scientific body convened by the United Nations, believe it will still be necessary to remove some carbon dioxide from the atmosphere to reduce global temperatures.

Critics argue that carbon dioxide removal is a dangerous distraction that will perpetuate the behaviour that is causing the climate crisis.

“Carbon capture will increase fossil fuel production; there’s no doubt about it,” said Mark Z. Jacobson, a professor of civil and environmental engineering at Stanford University. “It does not help climate one bit.”

But for now, neither investors nor customers are shying away.

A group of companies, including Stripe, H&M, J.P. Morgan and Meta, have banded together to make more than $1 billion in purchase commitments for carbon dioxide removal. Other companies, including Airbus, Equinor and Boeing, have pledged to pay for the service, too.

Some companies are trying to offset their emissions. Some see value in helping to develop a new industry they might one day profit from. And some say they are simply trying to do the right thing.

“This isn’t intrinsically tied to our day-to-day business,” said Nan Ransohoff, the head of climate at Stripe, an online payments company that is co-ordinating the group purchasing. “But we care a lot about progress and trying to help the world move in the right direction.”

The US government is supporting the industry. The Inflation Reduction Act more than tripled the tax credit for capturing and storing carbon removed directly from the atmosphere to $US180 per ton.

The bipartisan infrastructure law signed by President Joe Biden in 2021 included $US3.5 billion for the creation of four demonstration projects.

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Executives don’t believe that the carbon dioxide removal industry will be knocked off course by President-elect Donald Trump, who has called climate policies a “scam” and has said he wants to roll back many of Biden’s climate initiatives.

Support for the new technology “has been very bipartisan,” said Noah Deich, who until recently was the deputy assistant secretary of carbon management at the Energy Department.

Last month, Republican senator Lisa Murkowski and Democratic senator Michael Bennet introduced legislation that would create additional tax incentives for the carbon dioxide removal industry.

And the demonstration projects being funded by the infrastructure law have been championed by some Republicans. “This will help ensure our economy is built for the future,” Senator Bill Cassidy of Louisiana posted on social platform X when his state was selected as one of the sites. “It is great for our state!”

Yet even as enthusiasm for the technology grows, there is not nearly enough supply to meet the demand. Only 4 per cent of all purchases have been fulfilled, according to CDR.fyi.

Pulling greenhouse gases out of the air is also expensive. Today, it can cost as much as $US1000 per ton to capture and sequester carbon dioxide. Many analysts say the price would need to drop to around $US100 a ton for the industry to take off.

“This isn’t a market,” Steel said. “A market means liquidity, repeatability, standards. We have none of that here.”

But at least for now, investors are still eagerly funding new companies in the field, hoping that some of their bets pay off.

Svante, one of many Canadian companies in the industry, has received more than $570 million from small venture firms as well as big energy companies like Chevron.

Climeworks, a Swiss company that has already built the largest operational direct air capture facility in the world in Iceland, has raised more than $US800 million from investors, including Singapore’s sovereign wealth fund and individuals like venture capitalist John Doerr.

Doerr is also a partner in Breakthrough Energy Ventures and was with Gates in London this summer. “We’re going to need carbon removal,” Doerr said, adding that the need to quickly scale the companies was a “code red” situation.

As with any industry, many startups are likely to fail for everyone that hits it big. But to investors, that is a risk worth taking.

“There will be some big winners in this space,” said Clay Dumas, co-founder of Lowercarbon Capital, a venture firm that has backed several of the companies. “You could be wrong 95 per cent of the time and still look like a genius when you send a bunch of money back to your investors.”

This article originally appeared in The New York Times.

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