With respect to carbon capture and storage specifically, the range of applications includes power, cement and fertilizer. It could also include the production of oil sands. This spans a wide range. The capital investment needed to build a carbon capture and storage device and the sequestration, the wells, requires a certain amount of upfront capital. After that, the operating costs are significant.
The way the United States has approached this problem is to create a tax credit for 12 years that would pay for the capital and operating costs, and they've done that through one program, the section 45Q tax credit. In Canada, the investment tax credit allows for perhaps half of the capital up front to be shared between the government and the private sector, and then the government will need to contractually guarantee or ensure that the carbon tax remains in place.
When the private sector looks at financing these projects, the investment rates of return and how it would do those calculations, that's in law. As a fiduciary and a manager of capital, how we make these decisions is enshrined in law. Basically, there needs to be a rate of return for a pension fund or other sorts of institutional investors to invest in the space.
The framework of the investment tax credit, combined with a guarantee on the carbon tax, will allow institutional capital to invest in this broader asset class, which we've called carbon management infrastructure.