The phone-booth-size machine humming away in a Tucson lab may look like a science-fair project on steroids. Its inventors, however, say it's a potent new weapon in the battle against global warming.
Its task is elegantly direct. The 9-foot-tall device, encased in see-through plastic, scrapes the chief global warming gas — carbon dioxide — right out of the atmosphere. As air wafts through, CO2 sticks to large chemically coated panels while oxygen and other innocuous gases breeze by. The carbon inhaler's developer, Global Research Technologies, is among hundreds of U.S. companies scouring for ways to reduce the world's greenhouse gas emissions and cash in on federal requirements anticipated by 2010 to combat global warming.
"It's a gold rush," says Peter Fusaro, head of consulting firm Global Change Associates.
The CO2-busting industry is exploding as federal legislation to cap the emissions of utilities and other industries grows more likely, offering the prospect of huge profits. Nearly 400 start-ups are operating 600 carbon-mitigation projects in the USA, with the number of companies set to triple the next two years, says consulting firm Point Carbon.
Their product? Carbon offsets. One carbon offset, or credit, equals a ton of CO2 removed from the air.
Hedge funds and investment banks are starting to trade offsets like stocks and bonds, betting they could soar in value if greenhouse gas caps are imposed. JPMorgan jpm expects to buy and sell hundreds of millions of offsets this year, up from tens of millions last year.
For several years, entrepreneurs have had modest success selling credits to corporations and consumers who want to be good citizens and offset the carbon that's produced when they drive cars or use electricity.
Many are deploying tried-and-true techniques such as burning the noxious emissions of landfills and cow manure and restoring forests. Others are testing grander but more controversial strategies, such as growing carbon-absorbing plankton in the South Pacific.
The voluntary market for U.S. offsets is still meager, though it more than doubled last year to $150 million to $200 million, says research firm Ecosystem Marketplace. In Europe, which has complied with mandatory carbon limits since 2005 under the Kyoto treaty, the offset market hit $10 billion last year. Sales in the USA, the world's biggest carbon emitter, could be as high as $175 billion by 2020 if a federal cap is approved, says research firm New Carbon Finance.
Such legislation has grown all but inevitable. Although President Bush opposes carbon caps, Democratic presidential candidates Hillary Clinton and Barack Obama, and Republican front-runner John McCain all favor curbs. Many analysts expect a law to be passed by 2010 and caps to start as early as 2012.
Under a bill that cleared a Senate committee in December, global-warming discharges by major polluting U.S. industries would be cut 71% by 2050. A cap and trade system would be created to spur progress. Utilities, oil companies and manufacturers that exceed their emissions caps would buy allowances — which don't yet exist — from others in those industries that fall under their limits. Unlike an offset, which is a ton of carbon extracted from the air, an allowance lets a company emit a ton of CO2.
The number of allowances would fall over the years, driving up prices, as the government lowers maximum emissions.
Costs come down on consumers