The carbon portfolio is a balancing act

We come at carbon from different starting points. One of us builds carbon removal portfolios at Climeworks Solutions, with roots in engineered removal. The other advises governments on nature-based programmes. Where you sit shapes what you fund, and we have both felt that pull. Funding climate solutions well is a balancing act. The hardest part is making the case for the approach you did not build your career on.

At London Climate Action Week, we watched a room test split in real time. A panel asked the audience to split a hypothetical 2% of global GDP, (~ $2 trillion a year) across three options with a portfolio approach in mind: 

1) Industrial emissions reductions in energy, steel, cement and transport sectors;

2) Natural climate solutions in forests, wetlands, grasslands and farmlands; and, 

3) Engineered climate solutions that use technology to pull carbon dioxide from the air and store it.

The room, mostly nature people, put 36% to industrial, 47% to nature, and 13% to engineered. A separate panel of 22 global experts arrived at slightly different estimates: roughly half to industrial, a third to nature, and 14% to engineered. Both gave engineered the smallest share. They split the rest in almost opposite ways. 

The durability debate has often pushed the market into a false binary. Nature stores carbon that can be lost again to fire, drought or clearing. Engineered storage generally holds for much longer. Durability matters, but in the debate as it is usually framed, it often becomes the single test a solution must pass. But to maximize impact and value, one should build a portfolio that weighs durability alongside additionality, measurement and co-benefits (including adaptation and resilience), and lets the mix shift over time.

Balance several factors at once and the tension loosens. Industrial cuts do the largest near-term work, though several industrial categories carry their own baseline and additionality questions. Nature is available now, at scale, with gains for people and biodiversity. Engineered removal is at an earlier stage and costs more today, so its near-term share is smaller. But it needs investment now to be ready at the scale we will need later. They do different jobs on different timescales. That is the case for holding all three, with the mix changing as the decades pass.

The practical question is therefore not whether nature or technology should win more of the room. It is whether buyers, funders and policy-makers can build portfolios that reflect what each approach is good at, and feel confident that the risks are clear and can be managed. That requires fluency across both nature-based and engineered removals: understanding the risks, evidence standards, delivery timelines and co-benefits well enough to allocate capital with confidence rather than ideology. Curiosity is the first step away from counter-productive tension and toward practical complementarity The next step is to understand and advocate for each solution. One way to start with this is to learn more about each other’s sector and have the ability to advocate for both: imagine coming from the nature-based solutions world and pitching engineered removals to a boardroom and vice versa. 

The market needs to move toward credible portfolios that hold all three approaches.

Back industrial reductions, nature-based solutions and engineered removals now, and each can play the role it is best suited to as needs change over time. That is something we can solve together.

About the authors

Michael Denner leads science and technology at Climeworks Solutions and works across nature-based and engineered removal. Danae Maniatis is an independent consultant working on nature-based carbon. Both are part of SHIFT-CM.

About SHIFT-CM

SHIFT-CM is a collection of scientists, practitioners, and policy-makers focused on improving the scientific foundation of Natural Climate Solutions (NCS) crediting. SHIFT CM’s Optimising Climate Solutions working group asks how a credible climate portfolio should be split across industrial emissions reductions, natural climate solutions, and engineered removals.