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International Transport of Captured $$\hbox {CO}_2$$ CO 2 : Who Can Gain and How Much?


  • Joris Morbee



If carbon capture and storage (CCS) is to become a viable option for low-carbon power generation, its deployment will require the construction of dedicated CO 2 transport infrastructure. In a scenario of large-scale deployment of CCS in Europe by 2050, the optimal (cost-minimising) CO 2 transport network would consist of large international bulk pipelines from the main CO 2 source regions to the CO 2 sinks in hydrocarbon fields and saline aquifers, which are mostly located in the North Sea. In this paper, we use a Shapley value approach to analyse the multilateral negotiation process that would be required to develop such jointly optimised CO 2 infrastructure. First, we find that countries with excess storage capacity capture 38–45 % of the benefits of multilateral coordination, implying that the resource rent of a depleted hydrocarbon field (when used for CO 2 storage) is roughly $${\$}1$$ $ 1 per barrel of original recoverable oil reserves, or $${\$}2$$ $ 2 per boe (barrel of oil equivalent) of original recoverable gas reserves. This adds 25–600 % to current estimates of CO 2 storage cost. Second, countries with a strategic transit location capture 19 % of the rent in the case of national pipeline monopolies. Liberalisation of CO 2 pipeline construction at EU level could eliminate the transit rent and is shown to reduce by two-thirds the differences between countries in terms of cost per tonne of CO 2 exported. Reaching agreement on such liberalisation may be politically challenging, since the payoffs are shown to be strongly divergent across countries. Copyright The Author(s) 2014

Suggested Citation

  • Joris Morbee, 2014. "International Transport of Captured $$\hbox {CO}_2$$ CO 2 : Who Can Gain and How Much?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 57(3), pages 299-322, March.
  • Handle: RePEc:kap:enreec:v:57:y:2014:i:3:p:299-322
    DOI: 10.1007/s10640-013-9670-y

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    References listed on IDEAS

    1. Kleindorfer, Paul R. & Wu, D. -J. & Fernando, Chitru S., 2001. "Strategic gaming in electric power markets," European Journal of Operational Research, Elsevier, vol. 130(1), pages 156-168, April.
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    5. László Á. Kóczy & Dávid Csercsik, 2011. "Externalities in the games over electrical power transmission networks," Working Paper Series 1103, Óbuda University, Keleti Faculty of Business and Management.
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