How environmental regulation could undercut Elon Musk’s $100 million innovation prize

By James Pethokoukis

Elon Musk is funding a $100 million innovation prize — apparently the largest in history — to fight climate change. The goal of the four-year competition, according to XPrize, is to encourage “innovators and teams from anywhere on the planet to create and demonstrate solutions that can pull carbon dioxide directly from the atmosphere or oceans ultimately scaling massively to gigaton levels, locking away CO2 permanently in an environmentally benign way.”

The Musk prize is technology agnostic, but one possible approach is technology that could pull carbon directly from the air and then store it underground. Of course, such machines would themselves consume lots of energy. In a 2019 summary of an analysis in Nature, climate and energy website Carbon Brief explains that a rollout of enough capacity to significantly limit warming “would require energy up to 300 exajoules each year … This is more than half of overall global demand today, from all sources, and despite rising demand this century, it would still be a quarter of expected demand in 2100.”

Carbon dioxide storage tanks are seen at a cement plant and carbon capture facility in Wuhu, Anhui province, China September 11, 2019. Picture taken September 11, 2019. Via REUTERS/David Stanway/File Photo

So where would all that energy come from? Perhaps some mix of solar and wind, as well as advanced nuclear. Geothermal is also a possibility. And along with increased energy-generating capacity would come an expanded and enhanced energy infrastructure system. Accomplishing all that in the upcoming years and decades might come a lot faster and cheaper with regulatory reform. Good news: Reforms proposed by the Trump administration last year might make the National Environmental Policy Act of 1970 less of an obstacle to that clean energy build-out, whether or not Musk’s efforts bear fruit. Bad news: The Biden administration might reverse them.

NEPA requires environmental impact statements and public input for major federal action that could significantly affect the environment. Not surprisingly, the burden and scope of NEPA have greatly expanded over the decades and far exceeded what many in Congress originally expected. As a Niskanen analysis notes:

In the early days, NEPA’s procedural requirements were modest: An EIS could be as short as 10 pages, and the legislation didn’t provide for a private right of action. Courts soon declared a private right of action, though, and under the pressure of litigation the law’s demands grew ever more onerous: Today the average EIS runs more than 600 pages, plus appendices that typically exceed 1,000 pages. The average EIS now takes 4.5 years to complete; between 2010 and 2017, four such statements were completed after delays of 17 years or more. And remember, no ground can be broken on a project until the EIS has made it through the legal gauntlet – and this includes both federal projects and private projects that require a federal permit.

Perhaps there needs to be prize-awarded pro-progress innovation in regulatory design.

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How environmental regulation could undercut Elon Musk’s $100 million innovation prize