The economics of CCS: Why have CCS technologies not had an international breakthrough? (original) (raw)
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Economics of Carbon Capture and Storage
Recent Advances in Carbon Capture and Storage, 2017
Human-engineered capture of CO 2 emissions at the point source and subsequent longterm storage of this CO 2 underground represent a potential mitigation strategy for global warming. The so-called carbon capture and storage (CCS) projects are technically feasible but have not been well established from an economic efficiency perspective. This chapter uses economic theory to describe the costs, benefits, and economically efficient level of CCS provision. Achieving the economically efficient level of CCS provision requires consideration of both the private and public costs and benefits of CCS and will also likely require some degree of government intervention in the form of economic incentives and/or direct regulation.
Carbon Capture and Storage: Selected Economic and Institutional Aspects
Carbon Capture and Storage (CCS) is the process whereby the combustion of fossil fuels is modified so as to capture the bulk of the CO2 that would otherwise be emitted, compress it, transport it, and then store it permanently in geological formations underground (or under the seabed). CCS has been identified by policy-makers at the European and global levels as an important option to help achieve a low-carbon future without creating substantial economic or environmental dislocations. The study provides a general overview of CCS and of related economic and institutional challenges ahead of its probable commercial deployment. In particular, cost estimates for the main components of the CCS value chain are reviewed with reference to the McKinsey report of 2008. The economic geography of plant location and CO2 pipeline investment needs is also mentioned. Institutional challenges are then addressed, notably with reference to the EU ETS and to the (so far unsuccessful) inclusion of CCS in...
The potential role of Carbon Capture and Storage, under different policy options
Energy Procedia, 2009
This paper explores the potential role of CCS under different policy options in the Dutch electricity sector. A bottom-up simulation model is used to evaluate different policy scenarios. The results show that CCS plays only a moderate role for gradually rising CO 2 prices. By using the scale advantages in CO 2 transport already for the first CCS plants comparable to the level of large scale transport, the competitiveness of CCS is improved considerably. Furthermore, our results indicate that different policy options stimulate different types of CCS technologies. Finally, stimulating CCS and renewable energy sources simultaneously is more cost effective in the long run than stimulating solely CCS.
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Carbon capture and storage (CCS) promises the low-emissions coal power station. The technology is under development; a number of technological, economic, environmental and safety issues remain to be solved. With regard to possible trajectories towards a sustainable electricity system, CCS raises a number of questions. On the one hand, CCS may prolong the prevailing coal-to-electricity regime and countervail efforts to increase energy efficiency. On the other hand, given the indisputable need to continue using fossil fuels for some time, it may serve as a bridging technology towards a sustainable energy future. Energy efficiency could then be conceptualized as a natural ally of CCS, as it aims at reducing the consumption of energy and thus the amount of CO 2 to be captured and stored.
Is There a Future for Carbon Capture and Storage?
Hradec Economic Days, 2021
The article discusses the political economy of CCS. The IPCC reports gives CCS a significant role in keeping global warming somewhere between 1.5 and 2 degrees Celsius, but still there is very few installations in operations and very few in the pipeline. This raises the question of why the diffusion of CCS has been slow and seem to slow down rather than speed up. First the paper discusses the question: When there is consensus the takeoff of CCS depends on a high CO2 price, why is the price so low? Secondly discusses: What would happen if the CO2 price was 100 USD or higher? Would CCS then be the preferred way to reduce emissions or would other technologies be not only cheaper, but also faster and easier to implement? The paper concludes that the question the role of CCS in mitigating climate change also must be formulated as political problem, where the political/electoral effects of a high CO2 price plays a key role and needs to be taken much more explicitly into consideration than has been done so far. The paper uses primarily the fate of CCS in Norway as a case study of the political economy of CCS.
CO2 abatement economics - a practical view
Research Square (Research Square), 2021
The present studies aim at bridging between sophisticated scienti c research and the broader society. The present work examines the economic stimulus required for the intended transition from fossil sources to renewables. To estimate cost competitiveness in energy supply from the various primary sources, a practicable, yet comprehensively levelized and fully described framework is applied. The estimates are compared with previous eld reports and projection studies. In result, renewables have principally become cost-competitive to fossil sources in energy production. The overall transition to renewables is found to potentially come cost-neutral. It is argued that no special discounting be necessary if carbon emissions reduction is established in the order of 3 %/year (year-on-year) for about 100 years. Regarding transmission belts, it is advocated to cap plain CO 2 pricing at 50 $/tCO 2 and moreover, to emphasize distributive and differentiative regulation when considering free-market-based mechanisms such as CO 2 pricing and carbon certi cation/crediting.
Energy Procedia, 2011
The Copenhagen Accord recognizes the scientific view that the increase in global temperature should be below 2 degrees Celsius, and deep cuts in global emissions are required. According to the Fourth Assessment Report of IPCC, the global emissions in 2050 should be reduced by 50% at least compared to the 2000 level in order to achieve below around 2 degrees Celsius and 450 ppmv-CO 2 eq.. However, the future improvement over 4% p.a. will be needed to achieve halving global emissions within a few percent of GDP losses, while the historical carbon intensity was improved by 1.2% p.a, There are large gaps between historical trends and the required efforts for such a challenging target. In addition, historical trends indicate that it is very difficult to achieve reductions in primary energy consumptions. Therefore, decarbonization of the energy, i.e., carbon intensity improvement, is indispensable for deep emission cuts. Although the developed countries had some trends of the decarbonization, it is also far from such targets of large emission reductions. De-carbonization technologies of nuclear power, renewable energies and Carbon Dioxide Capture and Storage (CCS) are significant. Most emission reduction scenarios including the Intergovernmental Panel on Climate Change (IPCC) report and the International Energy Agency (IEA) show increase in carbon price to advance carbon emissions for the future under the assumptions on sustainable global cooperation for emission reductions. However, It is difficult to sustain global cooperative intention to tackle global warming over 100 years in a real world. The carbon price rather should be decreased in the long-run for sustainable development and sustainable global actions for emission reductions. In addition, historical and currently planed carbon prices of emission trading schemes in many countries are low in the real world, and high carbon prices, particularly explicit prices, are unacceptable politically. CCS development and deployment has risks of intermittent carbon price in near-and mid-term and of carbon price converging zero in long-term. This paper discusses this gap between proposed scenarios assuming ideal world including continuous increase in carbon price and politically acceptable carbon prices in the real world, and outlook of plausible CCS deployment considering the gap.
Policies to Promote Carbon Capture and Storage Technologies
Environmental and Resource Economics
AsbstractWe model the value chain of Carbon Capture and Storage (CCS) by focusing on the decisions taken by actors involved in either capture, transport or storage of CO2. Plants emitting CO2 are located apart. If these invest in carbon capture facilities, the captured CO2 is transported to terminals, which again transport the received amount of CO2 to a storage site. Because of network effects, we may have three equilibria: one with no CCS, one with low investments in CCS, and one with high investments in CCS. In a numerical specification of the model, we find that the market for CCS may be in a state of excess inertia, i.e., even if the social cost of carbon is sufficiently high to justify investment from a social point of view, the market actors may not succeed in coordinating their efforts to reach the equilibrium with high investment. The government should then consider offering economic incentives to investments. In addition to the network effect, several other market imperfec...