Buyers contracted nearly 30 million tons of durable carbon removal in 2025, more than triple the 2024 total, according to CDR.fyi data reported by Heatmap. About 90% of those purchases came from a single company, Microsoft, and suppliers delivered only about 450,000 tons during the year. That is a sliver of the six to 10 billion tons of removal a year that climate scenarios suggest the world will need by 2050. The technology to pull carbon out of the air works, but the customers needed to scale it remain scarce.

Our guest today, David Babson, is executive vice president of the Energy, Climate, and Nature domain at the XPRIZE Foundation. He calls the slow progress a market failure, because the technology is progressing faster than it is being adopted. Babson previously led MIT’s Climate Grand Challenges initiative and was a program director at the U.S. Department of Energy’s ARPA-E. His portfolio includes XPRIZE Carbon Removal, which drew 1,334 teams and whose participants have raised more than $3.3 billion. In April 2025, Mati Carbon won its $50 million grand prize for spreading crushed basalt on smallholder farms in India, where the rock locks away carbon dioxide. “If people could make money taking carbon out of the air and putting it underground, as opposed to only being able to make money taking it from underground and putting it in the air, we would be in a better place,” Babson says. Mati is weathering the slump in part because its rock dust also improves soil health and crop yields, giving farmers a reason to participate that doesn’t depend on carbon credit prices.

XPRIZE’s answer is to change what winners receive. Babson describes “mixed purses” that pair a cash award with a guaranteed buyer through an advance market commitment, a power purchase agreement, or an offtake contract. In one thought experiment, a carbon removal prize would come with a separate $1 billion fund raised from credit buyers, which qualified teams could draw on as they deliver verified tons. XPRIZE is applying the same thinking to a planned series of fusion energy prizes, pairing technical milestones with market mechanisms to build the supply chain that commercial fusion will require. The same gap between invention and adoption shows up in other XPRIZE competitions. On September 23, XPRIZE Wildfire awarded about $4.55 million from its $11 million purse, with defense contractor Anduril Industries taking first place in autonomous fire response along with a $1 million Lockheed Martin bonus. Babson expects costs to fall as fire agencies adopt the tools and as startups license individual components into cheaper platforms, though underfunded agencies will need a way to buy the first systems. He also notes that the competition left fuel management and ground-based autonomy for future prizes. Earlier this year, program director Andrea Santy told us that field testing had moved ahead of drone regulations. In biodiversity, Limelight Rainforest won $5 million for surveying 100 hectares of tropical forest in under 24 hours and identifying more than 250 species. Biodiversity still lacks a price, but Babson argues that once ecosystems can be measured, slow-walking policy becomes “a dereliction of what they should be doing.”

We also discuss the tension inside XPRIZE’s vision of “equitable abundance,” including a $101 million Healthspan prize that could add years of consumption to longer lives. Babson argues that abundant, cheap clean energy would let society move beyond efficiency as its organizing principle, powering uses such as indoor vertical farms that could return millions of acres of farmland to nature. You can follow XPRIZE’s new competitions and get involved in its prize ideation workshops at xprize.org.

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Interview Transcript

Mitch Ratcliffe  00:36

Hello. Good morning, good afternoon, or good evening, wherever you are on this beautiful planet of ours. Welcome to Sustainability In Your Ear. This is the podcast conversation about accelerating the transition to a sustainable, carbon-neutral society, and I’m your host, Mitch Ratcliffe. Thanks for joining the conversation today.

Let’s talk about the power and the uses of grand challenge programs to kickstart low-carbon industries and respond to the changing environment. Over the past several years, we’ve talked on the show with leaders of grand challenge programs designed to accelerate progress on humanity’s most difficult challenges, from pulling carbon out of the atmosphere to fighting rapidly growing wildfire threats in cities and rural communities. Many of these competitions have been launched by XPRIZE, whose leaders have shared on the show the stories of these competitions as they launched and unfolded.

Today is a chance to take stock, to look back and think about how climate markets, technology, and politics are changing fast, and how that makes this a good moment to ask the question: Are these programs designed to accelerate progress actually delivering that progress?

Our guest today designs XPRIZE’s climate bets. David Babson is executive vice president of the Energy, Climate, and Nature domain at the XPRIZE Foundation. Before XPRIZE, he was the executive director of MIT’s Climate Grand Challenges initiative and a program director at the U.S. Energy Department’s ARPA-E energy technology research agency.

His portfolio includes the largest incentive in prize history. In 2025, Mati Carbon received a $50 million grand prize for their enhanced rock weathering solution for capturing and drawing down carbon, and XPRIZE now reports that companies participating in its programs have raised $3.3 billion. That carbon removal win arrived just as the removal market hit serious turbulence, and as XPRIZE’s wildfire competition wrapped up with its top prize still unclaimed.

So we’re going to discuss what grand challenges can really accomplish, which winners continue to build and which stall, and what the reasons are, as well as the tensions inside a portfolio that funds both climate solutions and longer human lifespans. We’ll get to the conversation right after this brief commercial break. Stay tuned.

[COMMERCIAL BREAK]

Welcome back to Sustainability In Your Ear, and welcome, David Babson, to Sustainability In Your Ear. How are you doing today?

David Babson  03:10

I’m doing well.

Mitch Ratcliffe  03:11

I’m glad to have you here. You’ve run research portfolios at ARPA-E and MIT. What can a prize purse accomplish that a well-funded grant program can’t, or are they complementary?

David Babson  03:22

They’re absolutely complementary. The way that I think about it is that the value of these different mechanisms for promoting innovation is at different parts of the innovation supply chain, if you will. A prize is not a substitute for the very necessary investments that places like governments make into basic, applied, and advanced research. In fact, those types of investments are really valuable for establishing the innovation ecosystems and the technical capacities to eventually win prizes.

Where the prize is very valuable is somewhat downstream: translating technologies, ideas, and innovations that are coming out of academia and labs to market for scale. It challenges the innovators to imagine those technical capacities as solutions to global challenges, and then the visibility that the prize brings to those translations of technologies de-risks funding to flow to those innovators so they can imagine their uses in practice.

So I actually see them as very complementary, particularly when it comes to solutions in the energy and climate space that require rapid adoption of technologies in markets to have impact. Just having an energy solution or a climate solution is not valuable unless it can be de-risked and connected to markets to scale for impact. And that’s what the prize is actually very good at doing.

Mitch Ratcliffe  05:22

That comes through in the impact report that you all published recently. About 1,300 different organizations were catalyzed. The groups came together, apparently, because of their desire to compete in the competition.

What I’ve found in my work with public-private partnerships, in particular, is that impact investors are looking for that initial traction, and to a degree, the prize and the distribution of money within the prize group is that catalyst that says there’s a real opportunity for an impact profit, something that both does good and is profitable. How does the organization consult with the financial communities that are going to back these companies once your prize has been awarded? Is there a backroom conversation about that, for lack of a better way of putting it?

David Babson  06:10

Not an explicit backroom conversation about it, but the prize itself brings attention to the innovations that are coming out to win the competition. Oftentimes, as you’re noting, these impact investing communities exist, and they are looking for technologies to invest in to have impact.

What the prize is effective at doing is casting a wider net and surfacing the best solutions across the board, where there may have been silos in the past, or there may not have been transparency to individual investors about where to put their money. The prize is capable of elevating all of them, creating better visibility, and therefore, just by its inherent operation, creates better opportunities for investment capital to flow to the right types of teams to have greater impact more quickly.

So we don’t have explicit discussions with those types of investor communities to have them directly connected to individual prizes. But we often consult with investors and experts in industry to inform the metrics that we would want to have demonstrated, so that we know that when teams are winning our competitions, the demonstrations that they do are de-risking capital to flow to those innovators so that they can be translated to market.

Mitch Ratcliffe  07:47

We’re talking about growing industries, which of course means diversifying into a lot of specializations. Once you’ve got this kind of anchor winning team or teams, how does XPRIZE think about propagating the information that’s necessary for the rest of the industry to grow and fill in around them, in order to provide the kind of comprehensive geographic coverage and range of functions that are necessary for the industry to thrive? Is that something that you think about cultivating, like you would in agriculture?

David Babson  08:22

It is something that we think a lot about. With a few of the more recent prize competitions that we’ve run, we have also paired those competitions with a subsequent impact phase, which is designed to further build the community that has been established through the operation of the prize and connect the technologies that came out of the competition to the right types of markets and investors so that they can scale.

So that is one of the things that we’re thinking about in future competitions as well: not just running an innovation competition to surface new innovations, but how do we augment the community building that the prize provides as a way to also promote the back-end business models and industries that can scale those solutions for impact?

Mitch Ratcliffe  09:19

How would you describe the patterns you’re looking for that indicate that an organization can become that durable enterprise? What separates them from the rest? Have you got thoughts about that?

David Babson  09:29

I do have thoughts about it. In a lot of ways, the rigorous metrics that we set up when we’re designing the competition are informed by what experts believe would be the necessary demonstrations to actually generate a solution that is market viable. So a lot of it is very quantitative in terms of how we architect the competition.

But what we’ve also seen is that there are elements of winning teams that can’t always be controlled by just the scientific metrics. A lot of times, it’s the composition of the team, how diverse they are, and the unique mentality that the leaders of the team have in terms of their vision and their ambition. Those are parts that you can’t control for, but the prize model is very effective at also attracting the type of entrepreneurial, big-thinking individuals that actually tend to be behind some of the most successful companies.

Mitch Ratcliffe  10:40

Those big-thinking individuals often struggle with the transition from inventor. And to your point about the academic community often being the source of many of the teams that are competing, that’s not something that academics are necessarily good at. As part of the prize process, do you also begin to coach them on how to staff for the operators who are going to be able to translate the invention into a market success?

David Babson  11:04

Absolutely. On the front end, the prize itself sets a target that is typically beyond what researchers in an academic setting are imagining for what they’re doing. It gives them a way to imagine their technical innovations as scalable solutions to big problems, so that gets them excited to be in the competition. But you’re right: they’re not necessarily all business-minded or have the types of experience that would allow even very, very good solutions to become very strong companies and business models.

So one of the things that we have tried out recently, and it’s a model that we could replicate in future competitions as well, is an accelerator cohort in the carbon removal prize. It was optional for teams to opt into the cohort to get additional guidance and consulting from experts in startups and technology translation. That would help them think about the unique elements of their proposed carbon removal strategy, how they would connect it to markets, and how they would drive greater value for their solutions.

That is something that we can do as part of the competition, because we’re building a community of innovators that are striving toward a shared aim. Therefore, we can better define what an accelerator cohort looks like, so that the guidance that is provided is more effective at actually generating the right type of thinking for scaling the solutions that we’re interested in.

Mitch Ratcliffe  12:52

That kind of accelerator approach gets you ready for market competition, but it doesn’t always get you ready for the market in which you’re going to have to exist as an organization. It’s templated, and the specifics of any individual company’s success are very unique.

Let’s take Mati Carbon as an example. They won the $50 million prize. They are doing carbon drawdown using basalt ground up and mixed into farmers’ fields, but their success is really anchored in the carbon credit market’s growth. How does the prize work with those sources of carbon credit purchases, for instance, Meta or Microsoft, to connect them to these opportunities to make prize winners thriving organizations?

David Babson  13:38

There are some limitations to what we can do in that space. I think the uncertainty and the pullback in commitments to carbon credits and carbon markets is a challenge to the cohort of teams that competed in the carbon removal prize.

Ironically, I think one of the things that is allowing Mati to continue growing on the business plan that they have is that a lot of the value that they’re able to assign to their solution actually goes toward the agricultural implications: the ability for their treated lands to not just remove and store carbon, but to improve soil quality and soil health to improve agricultural yields. So there’s a different value stream that they can draw from. Broadly, it would be much better if there were a great deal more certainty in the market for carbon removal attributes.

Mitch Ratcliffe  14:47

This is a systems thinking problem, and your domain includes nature alongside energy and climate. How do you think differently about designing a prize for an ecosystem as compared to designing one for a technology that has a clear cost curve and an adoption challenge?

David Babson  15:02

I think that it’s a really interesting question, and one that we’ve been thinking about a lot in my domain in particular. As I was saying earlier, it’s not sufficient to just surface new innovations that could be a solution. In order for them to have impact, you have to figure out how you connect those to markets and get them into use, so that they can scale to drive that impact.

So there are two parts of the incentive model that we need to push on. We need to continue the incentive that the traditional non-dilutive purse offers in attracting innovators to demonstrate their potential solutions. But we also need to consider the market mechanisms that would help accelerate the transition of those technologies from the lab into the market.

So we’ve been thinking a lot about how we might develop mixed purses: a purse that includes some of those traditional non-dilutive types of incentives, as well as, potentially in the energy space, an advance market commitment, a power purchase agreement, or an offtake. The prize competition actually sets the metrics that need to be demonstrated and pressure-tests technologies and their capacity to scale, and what teams could win is access to a large power purchase agreement or advance market commitment. In many cases, the competitors in these competitions would value that certain offtake to scale their solutions over a traditional non-dilutive purse. So we’re thinking a lot about that in the energy space.

For nature, as you note, one of the challenges is that some of the markets that exist for potentially financing natural ecosystem restoration or nature-based climate solutions are soft. They’re voluntary markets. The certainty is not there. The other thing that we could do is create a contrived fund that is unique to the competition, but it would require teams that are competing to demonstrate some sort of verified outcome to unlock dollars from that fund. So we can create a market mechanism that would help a lot more teams scale their solutions.

Let’s do a thought experiment. If we ran the carbon removal prize in a similar way, the teams that won awards for their innovations in that competition could have still won those dollar amounts in the non-dilutive fashion. But separately, we could have raised, let’s say, a billion-dollar fund from entities that are buying attributes in that space, and then once teams were qualified, they would be competing to draw down from that fund based on verified output. So we would have actually created a certain market for them to scale in.

Mitch Ratcliffe  18:16

You mentioned a moment ago the shifting willingness to invest in this. Do you see a decline in big tech’s willingness to fund carbon capture and energy challenges as capital is directed toward the AI buildout, or is that actually underlining and making these investments more important?

David Babson  18:33

There are a number of factors that appear to have affected some of the commitments that large corporations have been making in terms of purchasing, or voluntarily committing to purchase, carbon attributes right now. That is a challenge that is creating uncertainty, and it is complicating the market.

But on the other hand, I do see a lot of interest in potentially investing in the clean energy transition, because of their need for enormous amounts of energy and the realization that growing energy demand must be paired with clean energy approaches that can scale quickly. Otherwise, we’re going to be tying in and locking in the growth of our data transition and our AI buildout with growing emissions that are unsustainable.

Mitch Ratcliffe  19:34

You had great increases in carbon capture between 2024 and 2025: 800,000 tons in 2024, and 4.9 million in 2025, so about 600% growth. But we’re a long way from the six to 10 gigatons of annual removal estimated to be needed by 2050. How do you feel we’re doing in terms of the race to start drawdown as we continue to generate more carbon?

David Babson  20:01

It’s a market failure at this point. One of the things that the carbon removal prize did is it really did surface a number of different pathways to durable carbon removal. Some of the approaches that were surfaced are more near-term, large-scale types of things that can be deployed quickly, like Mati is doing. And there are some of the more frontier approaches, like direct air capture and direct ocean capture, that are more energy-intensive and more costly now, but that could scale more modularly and contribute to a large carbon removal industry over time.

The challenge now is creating the market demand signals to scale all of those technologies up to what they need to be. The voluntary markets, particularly given the uncertainty in those markets now, are insufficient to really unlock the types of capital necessary to scale some of these solutions.

So the most valuable type of intervention now would be greater, more certain commitments about the market for carbon removal and the trajectory for demand over time, so that companies and entities that are playing in this carbon removal supply chain can plan, they can invest, and then they can work to meet that demand. Without the market side driving the buildout of the pathways, it’s going to be very difficult to get to where we need to be to help bend the warming curve and stabilize the climate long term.

Mitch Ratcliffe  21:47

So we are not on pace, or we are making progress toward the traction we need to achieve the pace that’s necessary?

David Babson  21:55

We’re not on pace.

Mitch Ratcliffe  21:56

Okay.

David Babson  21:57

We’re not on pace, but what I was saying is we’re not on pace with respect to the market side. The technology side is there. Yeah, the technology is there. Absolutely. And the technology can be improved, and it would be. I have great confidence in our human ingenuity and the capacity to make money if the markets support it, right?

If people could make money taking carbon out of the air and putting it underground, as opposed to only being able to make money taking it from underground and putting it in the air, we would be in a better place. It’s the inability of concerted coalitions of governments and entities to make the commitments to create certainty in those future markets that is preventing the scaling.

Mitch Ratcliffe  22:53

That’s a big problem, and also a great place to take a quick commercial break, folks. We’re going to be right back to continue the conversation. Stay tuned.

[COMMERCIAL BREAK]

Welcome back to Sustainability In Your Ear. Let’s return to my conversation with David Babson. He’s executive vice president of the Energy, Climate, and Nature domain at the XPRIZE Foundation, and we’re going to talk about some of the winners of the foundation’s grand challenge competitions.

But David, I want to start off by asking about the role of sponsors in how you design these programs. PG&E is one of the sponsors of the wildfire prevention and reduction programs, and of course, they paid $27 billion in claims after their lines contributed to some wildfires. What is their motivation for being involved? I think it’s pretty clear, but can you confirm that they want to reduce their liability, and how does that shape the way you design a prize?

David Babson  23:44

PG&E has been an outstanding sponsor, and yes, I believe that their interest in getting involved in wildfire was that they want to find technologies that can help reduce their liability, particularly in the industry they’re in. But from our interactions with them, they’re also just very philosophically aligned. They do believe in sustainability. They recognize that there are growing risks associated with wildfire, and they want to help support the types of innovations that are going to fundamentally change our ability to tackle the growing wildfire risk that is tied to climate change.

Mitch Ratcliffe  24:31

We all believe in technology. I mean, that’s why I’m doing this show and talking with you about it, and obviously PG&E does as well. But there are also cultural practices, planned burns, different forms of fuel management, and land use that could be integrated into these. Do we need to design some prizes that bring traditional practices into contact with technology in order to amplify the impact we want?

David Babson  24:58

Absolutely. The wildfire competition that we ran recently, we just announced the winners the week before last during Climate Week, and we are now doing a year of impact, translating the technologies that came out of that to market and integrating different components of them to build better solutions.

That prize was designed to address one particular challenge: the ability to identify nascent wildfires before they’ve gotten too big and become destructive. So, the ability to identify wildfires and generate intelligence so that responders can have better information to respond to small wildfires before they become destructive. And then, in Track B, also to be able to identify fires quickly and respond in a way that could extinguish them before they become destructive. So it was focused on those elements. The prize was designed specifically to tackle the barriers that existed on that front. It does nothing for the other contributors to wildfires.

There could be additional competitions and innovations that could tackle some of the other things that you’re talking about: how to better manage fuel, how to better develop technologies for fires that are at the wildland-urban interface, as opposed to just remote wildfires. There are different types of technologies that would be required, and enabling capacity that would be required to insert autonomy into ground-based systems.

In the current wildfire competition, these were all aerial, drone-type autonomous systems that could respond to wildfires. We may need ground-based autonomous systems that can build fire breaks or operate in the high-wind environments that are associated with wildfires. A single prize cannot do all of those things. We have to understand that the prize that was designed and run was focused on one element of it. And there are a bunch of different prize competitions that could be designed, launched, and run to tackle some of the other barriers that exist in the space.

Mitch Ratcliffe  27:32

Let’s talk a little more about the wildfire win. Anduril, which is a defense contractor, took first place in Track B that you were talking about, and they won another million-dollar prize from Lockheed Martin, too.

What does it mean for public fire agencies, which are often deeply underfunded, when the leading wildfire autonomy platforms come out of defense contractors who work in an industry that is used to charging premium prices? Are we going to be able to afford these tools in these communities, and how do we need to think about potentially attaching funding mechanisms for public entities to prize-winning technologies?

David Babson  28:11

Some of those challenges are a problem for public policymakers, perhaps. But the specific solutions that came out of that competition, and the cost of those technologies to deploy, are still subject to the same types of market mechanisms that exist outside of the defense space, where they’re used to charging a premium. With a couple of demonstration cases, and a few fire agencies being able to adopt and deploy these technologies as they scale, the cost will come down.

There will also be opportunities for aggregator business models to be established in the space. Component elements of the technologies that, say, Anduril created in the competition, but also some of the other competitors in that same space, like Dryad and others, can be integrated. So I actually imagine that some of the back-end implications of this will be that new types of startups will be established that will license individual components of the technologies from those entities into new types of platforms that, as they scale, will drive down the cost of the integrated platforms that come out of it.

Mitch Ratcliffe  29:43

Another winner, of the biodiversity monitoring prize, was Limelight Rainforest. They won $5 million for surveying 100 hectares of tropical rainforest in less than 24 hours.

David Babson  29:54

Yeah.

Mitch Ratcliffe  29:55

Biodiversity monitoring doesn’t currently have a lot of paying customers. How do we think about a prize to create a buyer for a public good like that, and what did you find when you looked at that in your 2026 impact report?

David Babson  30:09

You’re right that the market for some of these solutions is complicated and challenged. Part of that is because the biodiversity market and the discussions around it, particularly at the UN, are still a ways away from creating consistent pricing mechanisms for those attributes.

But one of the things that the prize did, by surfacing new capacities for how quickly and how accurately you could resolve biodiversity in environments like the rainforest, and on what timescales, is fundamentally change how policymakers can develop policy. Without the ability to generate the necessary data that could theoretically connect things like biodiversity to the potential markets that are being discussed, you won’t have the ability to have the same type of conversation.

So the fact that these technologies exist now actually puts additional pressure on policymakers to accelerate the pace at which we think about how we connect ecosystem services, like biodiversity, to markets, because now we have the tools. In the past, they could always argue, “Well, we don’t even have the mechanism to do this quantification,” and that made the discussions around the policy and the markets less urgent. Now that you do, it becomes even more apparent that inaction and slow-walking progress is actually a dereliction of what they should be doing.

Mitch Ratcliffe  32:00

It’s a trade-off that we’re talking about, between our desire for progress and our policymakers’ willingness to take the political risk to invest in and encourage those goals through mandates.

One of the interesting things, as I was reading some of the impact reports, is that there’s a tension, too, between different programs. Some create demand that will contribute to the harm that we’re doing in other contexts. For instance, XPRIZE Healthspan is putting $101 million toward therapeutics that will restore muscle, cognitive, and immune function in adults aged 50 to 90. By the way, thank you, as one of those, for doing that. I will appreciate those innovations. But longer, healthier lives in wealthy countries mean more years of consumption and thus more CO2. Do the health and climate teams ever sit down and try to confront some of these trade-offs as you’re thinking about what prizes to plan and launch in the future?

David Babson  32:55

We have, actually. We’ve talked a bit with the leader of the health domain. I have to give credit for the Healthspan prize to my colleague, Jamie. But we have spoken about that, right?

The shared vision that XPRIZE has for the future at an organizational level, this future of equitable abundance, does require us to often think about what the trade-offs are in different areas, and we have thought about that. We’ve thought about the resource implications of living longer. My position on this is that we can have both longer, healthier lives and more sustainable economic systems and capacities to support humanity. I don’t see them as opposed to one another. The success of the types of competitions we’re running in the energy, climate, and nature domain will support the future economic models and infrastructure that will allow more people to live longer and also more sustainably.

Mitch Ratcliffe  34:11

XPRIZE does frame its mission around the notion of abundance, which is an ongoing debate in societies. What lens should we be looking at this through? Last year, the Visioneering Fund launched a prize called the Fusion Energy Dominance Prize, with huge potential to replace our carbon-emitting energy technologies. But sustainability often centers on sufficiency and limits. How do you reconcile those two views? And if you could design one prize with no sponsor constraints, what would it be, as you think about the systems problem that we’ve been talking about implicitly throughout this conversation?

David Babson  34:48

Well, let me first talk about abundance and the idea of energy abundance. You’re absolutely right. We think about the need in sustainability for placing limits on things, and that’s absolutely the case. We have a limited amount of land. We have a limited amount of natural resources. We have a limited amount of clean water, and we need to think about those constraints.

In the energy space, our ability to produce more clean energy at a lower cost, achieving energy abundance, if you will, will enable our energy system to become, instead of part of the problem that is contributing to climate change and driving emissions right now, a tool for addressing resource challenges and climate challenges.

Imagine if our imagination for how we use energy wasn’t constrained by the need for energy to be very, very efficient. Inherently, right now, energy is tied to large marginal costs and large emissions, because the primary energy is coming from fossil fuels. Because of that, the present paradigm for energy is efficiency. So we don’t think about really novel ways in which we could use energy to do things.

If we didn’t have the constraints of efficiency because of the unsustainable primary source and the emissions associated with it, we could imagine using energy to power large indoor vertical farms that would spare millions of acres of agricultural land that we could then convert back to natural lands, allowing for greater carbon removal and biodiversity and all these other things. So think about the types of trade-offs that energy abundance would offer that are completely outside of the realm of possibility now.

Mitch Ratcliffe  36:59

So is that abundance model something that we can design a prize around to unlock the capital necessary to drive the transition that you just described? Is there one that would turn the tumblers, intellectually and financially?

David Babson  37:16

It is certainly something we’re thinking about with the fusion prize. Going back to something I mentioned earlier, in the energy prizes, we’re thinking about AMCs, offtake agreements, power purchase agreements, or some other sort of mechanism to create a purse that would tie innovations that come out of the competitions that we would run for fusion to demand signals that would actually allow them to scale.

Imagine the science experiment we’re running with fusion right now. It’s anticipated that we’ll have a few bespoke fusion reactors putting electrons on the grid by the middle of next decade. So at the end of that 10-year period, we’ll be able to say, “Man, we’ve run a multibillion-dollar science experiment, and it works. We can build a fusion reactor.” But it won’t matter if we don’t think about the supply chains and the market drivers to actually scale that capacity to have value and impact.

So one of the things that we are thinking about with our fusion prize, and it’s actually most likely going to be a series of prizes that target individual barriers to proving out the technology, is pairing that with thinking about how you build a market mechanism that will allow the supply chains to be built and the technology to be scaled on the back end. The thinking there is that you need to have both of those.

Mitch Ratcliffe  38:52

You’re going to be writing a lot of history, it sounds like. How can folks follow along as you go through these deliberations?

David Babson  39:00

People can follow XPRIZE and the announcements that we’re making, and track the prizes that we’re launching. Folks can also get involved with our ideation processes if they’re working in the energy, climate, or nature space. They can reach out to me or to others at XPRIZE to get connected. We’re doing ideation workshops.

We’re thinking about the pipeline of new prizes that we can launch to help facilitate our path to clean energy abundance, a stable climate that is resilient to the baked-in climate changes we’re going to see, and a future where we value natural ecosystems as critical infrastructure whose value we can evaluate in real time. We can connect it to markets, and we can have the tools to finance large-scale restoration of ecosystems and optimize those systems for their nature-based climate benefits and ecosystem services.

Mitch Ratcliffe  40:08

David, you’ve explained a broad range of the systems that we need to be thinking about in their relationship with our ability to innovate, and it’s been a fascinating conversation. I want to thank you for the time today.

David Babson  40:18

Thanks for having me.

[COMMERCIAL BREAK]

Mitch Ratcliffe  40:27

Welcome back to Sustainability In Your Ear. You’ve been listening to my conversation with David Babson, executive vice president of the Energy, Climate, and Nature domain at the XPRIZE Foundation. You can follow the prizes that he and his team lead, and do take a moment to learn about XPRIZE’s ideation workshops, at xprize.org. That’s XPRIZE, all one word, no space, no dash: xprize.org.

I keep coming back to one topic in the conversation: David’s verdict on carbon removal. He says we’re not on pace, and he said plainly that the technology is there, but the market isn’t. That’s a striking thing to hear from the man whose portfolio awarded the largest incentive prize in history, $50 million to Mati Carbon in 2025, to spread crushed basalt on farm fields in India and Africa. XPRIZE says companies in its programs have raised $3.3 billion in venture capital. Grand challenges clearly bring good solutions to light. A prize, though, can’t promise that anyone will buy what the winners make.

So the challenge, as David explained, is to de-risk those investments. And how do you do that? Companies must launch and close several customer agreements to demonstrate the traction that investors, even impact investors, need to see before they’ll back them.

The carbon capture statistics show that yawning market gap. Buyers signed contracts for nearly 30 million tons of carbon removal in 2025, more than triple the year before, according to CDR.fyi, but about 90% of that came from one buyer, Microsoft. If you leave Microsoft out, purchases actually fell last year. Now, that’s a reflection on our political environment as much as anything else. Companies captured and sequestered 450,000 tons of CO2 last year, compared to the six to 10 billion tons a year that scientists estimate we’ll need to remove by 2050 just to prevent climate change from continuing to worsen.

Mati Carbon is getting through this partly because its rock dust approach improves soil and crop yields, so farmers have a reason to participate that doesn’t depend on receiving carbon credit revenue, and the market can take its time to develop.

David’s proposed fix is a mixed purse: a cash award paired with an advance market commitment, a power purchase agreement, or another revenue-generating agreement, so that winning an XPRIZE comes with a guaranteed customer. His idea for a billion-dollar fund that qualified teams draw on as they deliver verified tons of CO2 sequestered builds on what the Frontier buyers’ coalition started back in 2022, and of course, Microsoft was the leader in that. As we just heard, they’re the market for all intents and purposes.

The hard part is always finding buyers. Washington is pulling back, and big tech is focused on data centers. David sees an opening in AI’s huge demand for power, which is pushing companies to buy clean energy. Carbon removal hasn’t gotten that kind of pull yet, but it must become an essential component of any carbon-generating energy investment to kickstart this industry at scale. If you’re going to generate CO2, we have to have a solution to draw it down. Those two things need to go together.

Now, the wildfire prize raises another interesting question: that of public goods. Anduril, the defense contractor, took first place in autonomous response, and they also won Lockheed Martin’s $1 million bonus. When Andrea Santy, who leads the wildfire prize program, talked with me on the show earlier this year, she said that testing in wildfire prevention is ahead of the regulations. We need those regulations to take shape, and to take shape soon.

Testing may be progressing nicely, but buying is a second gap. Rural fire districts can’t pay defense industry prices, so early subsidies from philanthropy may be necessary to achieve the scale that will bring those prices down. And that is David’s answer as well: Costs will fall as the tools scale, and new companies will license components to build cheaper systems. That could happen, but only if someone buys the first units at today’s prices, so subsidies are probably needed.

David was also candid about what the wildfire prize left out. We’re not working to manage fuel. We’re not building ground robots that can cut fire breaks, and the planned and traditional prescribed burns that Native communities have used for generations are not being factored into some of the strategies that we are concocting for our future. One competition, though, can’t cover the entire fire system, and so hopefully we’ll see that in the future.

Measurement is where XPRIZE may have the most leverage in policy. David argued that once you can measure an ecosystem’s value, policymakers will lose the excuse that it can’t be done, and slow progress will become a dereliction, as he put it, of duty. However, we’ve watched the SEC drop its climate disclosure rule, and we know the tools to measure are moving faster than any requirement to use them. So, again, we’ve got a mismatch, and we have to find a way to bring market and opportunity together.

Finally, there’s the question of abundance. David pictures cheap, clean energy changing how we use resources, powering indoor vertical farms that free up millions of acres of grassland to return to nature. But it’s also controversial. Author Michael Maniates made the opposite case on this show earlier this year. He said that we need consumption corridors, a floor and a ceiling on what we use. In other words, sustainability requires that we recognize our limits. Abundance fixes that math only if clean power becomes cheap, and David expects only a few fusion reactors to be on the grid by the middle of the next decade. So I suspect that we’re going to need both sides: cheap, clean energy and limits on how much land and material we consume.

So here’s what we need to watch: When the Fusion Energy Dominance Prize arrives, let’s see whether the purse includes a power purchase agreement or an offtake deal. If it does, XPRIZE will have built a market as well as launched a contest, and we’re going to be following that closely. So stay tuned, folks.

If this interview sparked an idea, pass it on to someone who’s working on climate finance, wildfire response, or biodiversity measurement. You folks are the amplifiers that can spread more ideas to create less waste. There are more than 560 episodes waiting in our archives, and you can find Sustainability In Your Ear on Apple Podcasts, Spotify, iHeartRadio, Audible, or whatever purveyor of podcast goodness you prefer. Thank you very much for your support.

I’m Mitch Ratcliffe. This is Sustainability In Your Ear, and we’ll be back with another innovator interview soon. In the meantime, folks, take care of yourself, take care of one another, and let’s all take care of this beautiful planet of ours. Have a green day.

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