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Characterizing the effects of policy instruments on the future costs of carbon capture for coal power plants

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  • Gregory Nemet
  • Erin Baker
  • Bob Barron
  • Samuel Harms

Abstract

We develop a methodology with which to assess the effects of policy instruments on the long-term abatement and costs of carbon capture and storage (CCS) technologies for coal power plants. Using an expert elicitation, historical data on the determinants of technological change in energy, values from the engineering literature, and demand estimates from an integrated assessment model, we simulate ranges of outcomes between 2025 and 2095. We introduce probability distributions of all important parameters and propagate them through the model to generate probability distributions of electricity costs, abatement costs, and CO 2 avoided over time. Carbon pricing has larger effects than R&D and subsidies. But much of the range of outcomes is driven by uncertainty in other parameters, such as capital costs and returns to scale. Availability of other low carbon technologies, particularly bioenergy with CCS affects outcomes. Subsidies have the biggest impacts when they coincide with expanding manufacturing scale of CCS components. Our results point to 4 parameters for which better information is needed for future work informing technology policy to address climate change: capital costs, demonstration plants, growth constraints, and knowledge spillovers among technologies. Copyright Springer Science+Business Media Dordrecht 2015

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  • Gregory Nemet & Erin Baker & Bob Barron & Samuel Harms, 2015. "Characterizing the effects of policy instruments on the future costs of carbon capture for coal power plants," Climatic Change, Springer, vol. 133(2), pages 155-168, November.
    • Handle: RePEc:spr:climat:v:133:y:2015:i:2:p:155-168
    DOI: 10.1007/s10584-015-1469-0
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    2. Jiang, Hong-Dian & Dong, Kangyin & Qing, Jing & Teng, Qiang, 2023. "The role of technical change in low-carbon transformation and crises in the electricity market: A CGE analysis with R&D investment," Energy Economics, Elsevier, vol. 125(C).
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    4. Bistline, John E., 2016. "Energy technology R&D portfolio management: Modeling uncertain returns and market diffusion," Applied Energy, Elsevier, vol. 183(C), pages 1181-1196.
    5. Cleary, Kathryne & Funke, Christoph & Witkin, Steven & Shawhan, Daniel, 2021. "The Value of Advanced Energy Funding: Projected Effects of Proposed US Funding for Advanced Energy Technologies," RFF Working Paper Series 21-10, Resources for the Future.

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