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The economics of CCS: Why have CCS technologies not had an international breakthrough?

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  • Durmaz, Tunç

Abstract

Eleven years on since the United Nations' Intergovernmental Panel on Climate Change was awarded the Nobel Peace Prize in recognition of its efforts in combating climate change, fossil fuels remain the most dominant global energy source. As the total replacement of fossil fuel energy is not expected to take place immediately in the near future, the International Energy Agency has repeatedly declared carbon capture and sequestration (CCS) as a key technology for mitigating climate change. However, CCS lacks the scale required for substantial reduction in carbon dioxide emissions from fossil fuel power generation. Even though CCS is one of the key technologies for mitigating climate change, why has this technology not had an international breakthrough? To shed light on this question, this paper employs a simple model of energy generation, scrutinizes the economic drivers of CCS based on the analytical results, and discusses the possible obstacles that can prevent a widespread rollout of the technology. This is followed by a state-of-the-art in literature pertaining to the economics of CCS, and a discussion that points to a dichotomy between the economic theory and reality. The study concludes with some policy suggestions and directions for future research.

Suggested Citation

  • Durmaz, Tunç, 2018. "The economics of CCS: Why have CCS technologies not had an international breakthrough?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 95(C), pages 328-340.
  • Handle: RePEc:eee:rensus:v:95:y:2018:i:c:p:328-340
    DOI: 10.1016/j.rser.2018.07.007
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    References listed on IDEAS

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    Cited by:

    1. Ahmed Fatah & Ziad Bennour & Hisham Ben Mahmud & Raoof Gholami & Md. Mofazzal Hossain, 2020. "A Review on the Influence of CO 2 /Shale Interaction on Shale Properties: Implications of CCS in Shales," Energies, MDPI, Open Access Journal, vol. 13(12), pages 1-25, June.
    2. Dato, Prudence & Durmaz, Tunç & Pommeret, Aude, 2020. "Smart grids and renewable electricity generation by households," Energy Economics, Elsevier, vol. 86(C).
    3. Tan, Raymond R., 2019. "Data challenges in optimizing biochar-based carbon sequestration," Renewable and Sustainable Energy Reviews, Elsevier, vol. 104(C), pages 174-177.
    4. Schroyen, Fred & Durmaz, Tunc, 2013. "Evaluating Carbon Capture and Storage in a Climate Model with Endogenous Technical Change," Discussion Paper Series in Economics 22/2019, Norwegian School of Economics, Department of Economics, revised 16 Oct 2019.
    5. Fan, Jing-Li & Xu, Mao & Yang, Lin & Zhang, Xian & Li, Fengyu, 2019. "How can carbon capture utilization and storage be incentivized in China? A perspective based on the 45Q tax credit provisions," Energy Policy, Elsevier, vol. 132(C), pages 1229-1240.
    6. Mikulčić, Hrvoje & Ridjan Skov, Iva & Dominković, Dominik Franjo & Wan Alwi, Sharifah Rafidah & Manan, Zainuddin Abdul & Tan, Raymond & Duić, Neven & Hidayah Mohamad, Siti Nur & Wang, Xuebin, 2019. "Flexible Carbon Capture and Utilization technologies in future energy systems and the utilization pathways of captured CO2," Renewable and Sustainable Energy Reviews, Elsevier, vol. 114(C), pages 1-1.

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