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Carbon storage challenged as climate change silver bullet by massive underground study

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The world has far fewer places to securely store carbon dioxide deep underground than previously thought, steeply lowering its potential to help stem global warming, according to a new study that challenges long-held industry claims about the practice.

The study, published Wednesday in the journal Nature, found that global carbon storage capacity was 10 times less than previous estimates after ruling out geological formations where the gas could leak, trigger earthquakes or contaminate groundwater, or had other limitations. That means carbon capture and storage would only have the potential to reduce human-caused warming by 0.7 degrees Celsius (1.26 Fahrenheit) — far less than previous estimates of around 5-6 degrees Celsius (9-10.8 degrees Fahrenheit), researchers said.

“Carbon storage is often portrayed as a way out of the climate crisis. Our findings make clear that it is a limited tool” and reaffirms “the extreme importance of reducing emissions as fast and as soon as possible,” said lead author Matthew Gidden, a research professor at the University Maryland’s Center for Global Sustainability. The study was led by the International Institute for Applied Systems Analysis, where Gidden also is a senior researcher in the energy, climate and environment program.

The study is the latest knock on a technology, for years promoted by oil and gas industry, that has often been touted as a climate solution. Today, carbon capture is far from being deployed at scale, despite billions of dollars in investments around the world, and the amount of carbon currently captured is just a tiny fraction of the billions of tons of carbon dioxide emitted every year.

Challenging assumptions

The 2015 Paris Agreement called for limiting average global temperature increase to 2 degrees Celsius (3.6 degrees Fahrenheit), but ideally below 1.5C (2.7F), compared to the early 1800s.

Many scenarios for achieving that have relied on carbon removal and storage, assuming the potential was “very large” because previous estimates didn’t account for vulnerable areas that might not be suitable, said study co-author Alexandre Koberle, a researcher at the University of Lisbon.

“That was never systematically challenged and tested,” said Koberle, adding that the study was the first to examine which areas should be avoided, leading to what they call a “prudent potential” that minimizes risks to people and the environment.

That’s not to say that carbon capture and storage isn’t important to keep global temperatures in check — but countries must prioritize how they use the limited storage and do so in conjunction with fast and deep emissions reductions, researchers said.

The technology ideally should be used for sectors that are difficult to decarbonize, such as cement production, aviation and agriculture, rather than to extend the life of polluting power plants or to prolong the use of oil and gas, Koberle said.

Industry officials defended carbon capture and storage as having an inherently low risk and say emerging technologies, such as storing carbon dioxide in basalt formations where it becomes mineralized, could dramatically increase total storage volumes.

What’s more, its use is “not optional if we hope to address global warming,” said Jessie Stolark, executive director of the Carbon Capture Coalition, adding that it must be combined with other ways to reduce emissions and balanced with the need for reliable and affordable energy.

Rob Jackson, head of the Global Carbon Project, a group of scientists who monitor greenhouse gas emissions, praised the study for its cautionary perspective. And though he’s optimistic that carbon capture technology itself will work, he believes very little will ever be stored “because I don’t think we’re willing to pay for it.”

“If we aren’t willing to cut emissions today, why do we expect that people in the future will just automatically pay to remove our pollution?” Jackson said. “We’re just continuing to pollute and not addressing the root of the problem.”

How it works

Carbon dioxide, a gas produced by burning fossil fuels, traps heat close to the ground when released to the atmosphere, where it persists for hundreds of years and raises global temperatures.

Industries and power plants can install equipment to separate carbon dioxide from other gases before it leaves the smokestack, or it can be captured directly from the atmosphere using giant vacuums.

Captured carbon is compressed and shipped to a location where it can be injected deep underground for long-term storage in deep saline or basalt formations and unmineable coal seams — though about three-fourths is pumped back into oil fields to build pressure to help extract more oil.

In the U.S., such projects have faced criticism from some conservatives, who say it is expensive and unnecessary, and from environmentalists, who say it has consistently failed to capture as much pollution as promised and is simply a way for producers of fossil fuels like oil, gas and coal to continue their use.

The most commonly used technology allows facilities to capture and store around 60% of their carbon dioxide emissions during the production process. Anything above that rate is much more difficult and expensive, according to the International Energy Agency.

Gidden, the lead author, said it’s clear that scaling up carbon storage will be important to achieving net-zero emissions and to eventually reduce them, and said the use of basalt formations is promising. But the world cannot wait for that to happen before acting decisively to slash fossil fuel emissions.

“If we prolong our dependence on fossil fuels for too long with the expectation that we will offset that by simply storing carbon underground, we’re likely saddling future generations with a nearly impossible task of dealing with not only our mess, but limited ways of cleaning it up,” he said.

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The Associated Press’ climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

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On Netflix’s earnings call, co-CEOs can’t quell fears about the Warner Bros. bid

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When it comes to creating irresistible storylines, Netflix, the home of Stranger Things and The Crown, is second to none. And as the streaming video giant delivered its quarterly earnings report on Tuesday, executives were in top storytelling form, pitching what they promise will be a smash hit: the acquisition of Warner Brothers Discovery.

The company’s co-CEOs, Ted Sarandos and Greg Peters, said the deal, which values Warner Brothers Discovery at $83 billion, will accelerate its own core streaming business while helping it expand into TV and the theatrical film business. 

“This is an exciting time in the business. Lots of innovation, lots of competition,” Sarandos enthused on Tuesday’s earnings conference call. Netflix has a history of successful transformation and of pivoting opportunistically, he reminded the audience: Once upon a time, its main business entailed mailing DVDs in red envelopes to customers’ homes. 

Despite Sarandos’ confident delivery, however, the pitch didn’t land with investors. The company’s stock, which was already down 15% since Netflix announced the deal in early December, sank another 4.9% in after-hours trading on Tuesday. 

Netflix’s financial results for the final quarter of 2025 were fine. The company beat EPS expectations by a penny, and said it now has 325 million paid subscribers and a worldwide total audience nearing 1 billion. Its 2026 revenue outlook, of between $50.7 billion and $51.7 billion, was right on target.  

Still, investors are worried that the Warner Bros. deal will force Netflix to compete outside its lane, causing management to lose focus. The fact that Netflix will temporarily halt its share buybacks in order to accumulate cash to help finance the deal, as it disclosed towards the bottom of Tuesday’s shareholder letter, probably didn’t help matters. 

And given that there’s a rival offer for Warner Bros from Paramount Skydance, it’s not unreasonable for investors to worry that Netflix may be forced into an expensive bidding war. (Even though Warner Brothers Discovery has accepted the Netflix offer over Paramount’s, no one believes the story is over—not even Netflix, which updated its $27.75 per share offer to all-cash, instead of stock and cash, hours earlier on Tuesday in order to provide WBD shareholders with “greater value certainty.”) 

Investors are wary; will regulators balk?

Warner Brothers investors are not the only audience that Netflix needs to win over. The deal must be blessed by antitrust regulators—a prospect whose outcome is harder to predict than ever in the Trump administration.

Sarandos and Peters laid out the case Tuesday for why they believe the deal will get through the regulatory process, framing the deal as a boon for American jobs.

“This is going to allow us to significantly expand our production capacity in the U.S. and to keep investing in original content in the long term, which means more opportunities for creative talent and more jobs,” Sarandos said.

Referring to Warner Brothers’ television and film businesses, he added that “these folks have extensive experience and expertise. We want them to stay on and run those businesses. We’re expanding content creation not collapsing it.”

It’s a compelling story. But the co-CEOs may have neglected to study the most important script of all when it comes to getting government approval in the current administration; they forgot to recite the Trump lines. 

The example has been set over the past 12 months by peers such as Nvidia’s Jensen Huang and Meta’s Mark Zuckerberg. The latter, with his company facing various federal regulatory threats, began publicly praising the Trump administration on an earnings call last January. 

And Nvidia’s Huang has already seen real dividends from a similar strategy. The chip company CEO has praised Trump repeatedly on earnings calls, in media interviews, and in conference keynote speeches, calling him “America’s unique advantage” in AI. Since then, the U.S. ban on selling Nvidia’s H200 AI chips to China has been rescinded. The praise may have been coincidental to the outcome, but it certainly didn’t hurt.

In contrast, the president went unmentioned on Tuesday’s call. How significant Netflix’s omission of a Trump call-out turns out to be remains to be seen; maybe it won’t matter at all. But it’s worth noting that its competitor for Warner Bros., Paramount Skydance, is helmed by David Ellison, an outspoken Trump supporter. 

It’s a storyline that Netflix should have seen coming, and itmay still send the company back to rewrite.



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Americans are paying nearly all of the tariff burden as international exports die down, study finds

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After nearly a year of promises tariffs would boost the U.S. economy while other countries footed the bill, a new study shows almost all of the tariff burden is falling on American consumers. 

Americans are paying 96% of the costs of tariffs as prices for goods rise, according to research published Monday by the Kiel Institute for the World Economy, a German think tank. 

In April 2025 when President Donald Trump announced his “Liberation Day” tariffs, he claimed: “For decades, our country has been looted, pillaged, raped, and plundered by nations near and far, both friend and foe alike.” But the report suggests tariffs have actually cost Americans more money.

Trump has long used tariffs as leverage in non-trade political disputes. Over the weekend, Trump renewed his trade war in Europe after Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland sent troops for training exercises in Greenland. The countries will be hit with a 10% tariff starting on Feb. 1 that is set to rise to 25% on June 1, if a deal for the U.S. to buy Greenland is not reached. 

On Monday, Trump threatened a 200% tariff on French wine, after French President Emmanuel Macron refused to join Trump’s “Board of Peace” for Gaza, which has a $1 billion buy-in for permanent membership. 

“The claim that foreign countries pay these tariffs is a myth,” wrote Julian Hinz, research director at the Kiel Institute and an author of the study. “The data show the opposite: Americans are footing the bill.” 

The research shows export prices stayed the same, but the volume has collapsed. After imposing a 50% tariff on India in August, exports to the U.S. dropped 18% to 24%, compared to the European Union, Canada, and Australia. Exporters are redirecting sales to other markets, so they don’t need to cut sales or prices, according to the study.

“There is no such thing as foreigners transferring wealth to the U.S. in the form of tariffs,” Hinz told The Wall Street Journal

For the study, Hinz and his team analyzed more than 25 million shipment records between January 2024 through November 2025 that were worth nearly $4 trillion.They found exporters absorbed just 4% of the tariff burden and American importers are largely passing on the costs to consumers. 

Tariffs have increased customs revenue by $200 billion, but nearly all of that comes from American consumers. The study’s authors likened this to a consumption tax as wealth transfers from consumers and businesses to the U.S. Treasury.   

Trump has also repeatedly claimed tariffs would boost American manufacturing, butthe economy has shown declines in manufacturing jobs every month since April 2025, losing 60,000 manufacturing jobs between Liberation Day and November. 

The Supreme Court was expected to rule as soon as today on whether Trump’s use of emergency powers to levy tariffs under the International Emergency Economic Powers Act was legal. The court initially announced they planned to rule last week and gave no explanation for the delay. 

Although justices appeared skeptical of the administration’s authority during oral arguments in November, economists predict the Trump administration will find alternative ways to keep the tariffs.



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Selling America is a ‘dangerous bet,’ UBS CEO warns as markets panic

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Investors are “selling America” in spades Tuesday: The 10-year Treasury yield is at its highest point since August; the U.S. dollar slid; and the traditional safe-haven metal investments—gold and silver—surged once again to record highs.

The CEO of UBS Group, the world’s largest private bank, thinks this market is making a “dangerous bet.”

“Diversifying away from America is impossible,” UBS Group CEO Sergio Ermotti told Bloomberg in a television interview at the World Economic Forum in Davos, Switzerland, on Tuesday. “Things can change rapidly, and the U.S. is the strongest economy in the world, the one who has the highest level of innovation right now.” 

The catalyst for the selloff was fresh escalation from U.S. President Donald Trump, who has threatened a 10% tariff on eight European allies—including Germany, France, and the U.K.—unless they cede to his demands to acquire Greenland.

Trump also threatened a 200% tariff on French wine and Champagne to pressure French President Emmanuel Macron to join his Board of Peace. Trump’s favorite “Mr. Tariff” is back, and bond investors are unhappy with the volatility.

But if investors keep getting caught up in the volatility of day-to-day politics and shun the U.S., they’ll miss the forest for the trees, Ermotti argued. While admitting the current environment is “bumpy,” he pointed to a statistic: Last year alone, the U.S. created 25 million new millionaires. For a wealth manager like UBS, that is 1,000 new millionaires a day. To shun that level of innovation in U.S. equities for gold would be a reactionary move that ignores the long-term innovation of the U.S. economy. 

“We see two big levers: First of all, wealth creation, GDP growth, innovation, and also more idiosyncratic to UBS is that we see potential for us to become more present, increase our market share,” Ermotti said. 

But if something doesn’t give in the standoff between the European Union and Trump, there could be potential further de-dollarization, this time, from Europe selling its U.S. bonds, George Saravelos, head of FX research at Deutsche Bank, wrote in a note Sunday. Indeed, on Tuesday, Danish pension funds sold $100 million in U.S. Treasuries, allegedly owing to “poor” U.S. finances, though the pension fund’s chief said of the debacle over Greenland: “Of course, that didn’t make it more difficult to take the decision.” 

Europe owns twice as many U.S. bonds and equities as the rest of the world combined. If the rest of Europe follows Denmark’s lead, that could be an $8 trillion market at risk, Saravelos argued. 

“In an environment where the geo-economic stability of the Western alliance is being disrupted existentially, it is not clear why Europeans would be as willing to play this part,” he wrote. 

Back in the U.S., the markets also sold off as the Nasdaq and S&P both fell 2% Tuesday, already shedding the entirety of Greenland’s value on Trump’s threats, University of Michigan economist Justin Wolfers noted. Analysts and investors are uneasy, given the history of Trump declaring a stark tariff before negotiating with the country to take it down, also known as the “TACO”—Trump always chickens out—effect. Investors have been “burnt before by overreacting to tariff threats,” Jim Reid of Deutsche Bank noted. That’s a similar stance to the UBS bank chief: If you react too much to headlines, you’ll miss the great innovation that’s pushed the stock market to record highs for the past three years.

“I wouldn’t really bet against the U.S.,” he said.



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