Carbon capture and sequestration: how much does this uncertain option affect near-term policy choices?
AbstractPolicy makers as well as many economists recognize geological Carbon Capture and Sequestration (CCS) as a key option to avoid costly emission reduction. While an extreme perspective is to envision CCS as a magic bullet to solve the issue of climate change, the economics perspective is more balanced and see it as a part of a portfolio of mitigation actions. Besides, as any novel mitigation technology, CCS can be implemented with a twofold purpose; on one side it can substitute some other technological efforts to reach a given environmental target. On the other side, it offers the opportunity to go for additional emission reductions andreach a "safer" climate target. In order to balance these twopossible utilizations of CCS and assess their respective effects onearly policystrategies, we undertake a twofold numerical experiment. First, a cost-efficiency analysis is undertaken where CCS sole effect is substitution of other efforts. This is followed by a cost-benefit analysis where both purposes have to be balanced. We find that future availability of CCS is less a reason to relax near-term abatement efforts than what could be inferred from previous analyses. Moreover, cost-benefit analysis indicates that the environmental target should be more ambitious when CCS is included in the picture.
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Date of creation: 16 Jun 2006
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Climate Change; Uncertainty; Sequestration; Cost-benefit analysis;
Other versions of this item:
- Valentina Bosetti & Laurent Gilotte, 2005. "Carbon Capture and Sequestration: How Much Does this Uncertain Option Affect Near-Term Policy Choices?," Working Papers 2005.86, Fondazione Eni Enrico Mattei.
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- Q29 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Other
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