The Earth Prize.

Richard Branson has set up a $25 million prize for the first person who can come up with a workable way of removing a billion tons of CO2 from the atmosphere every year.

It’s a clever idea, offering a big prize as an incentive to spur innovative research. Big purses like this (or the X-Prize, which offered $10 million for the first private suborbital space flight) attract a much wider range of innovators than most R&D projects do, for the simple fact that the barrier to entry is lower. To get a $500K DARPA research grant requires serious credentials and a solid academic or industrial R&D track record. But if you’ve got a great idea for how to build a new kind of rocket, the only barriers are your own abilities and resources.

What’s more, it probably costs Branson far less than $25 million to set up this prize. He’ll probably have put up a nominal amount, with the balance to be covered by an insurance policy from an underwriter who is betting that no one will be able to solve the challenge by the deadline. So there’s another incentive for the winner: You’ll be taking money from a rich bastard and an insurance company that bet against humanity’s ability to solve global warming.

Branson’s prize will probably attract all kinds of wild-eyed inventors and innovators, some of whom may actually have interesting ideas. And it will undoubtedly also draw heavyweight competitors who might even spend more than they’re likely to make from the prize, just for the prestige of having won it — and because an innovation like that could be very, very valuable economically. If you’ve got a system for removing CO2 from the atmosphere, you could make far more than Branson’s $25M by selling it to governments or to companies that want to (or need to, depending on government regulations) reduce their carbon emissions.

Incidentally, my personal favorite solution to global warming — nuclear winter — is not going to qualify, because although it would offset the warming, it doesn’t do anything about CO2. Alas. Neither would the proposal to put up giant orbiting space mirrors in order to block out some of the sun’s light. To win Branson’s prize, you actually have to remove some of the CO2 that his jets belch into the air.

The deadline for entries is 2010, although it could be extended to 2012 if no one comes up with a solution by then. So put on your thinking caps, people!

The Earth Prize.