Joining the CCS Club! Insights from a Northwest European CO2 Pipeline Project
The large-scale diffusion of Carbon Capture and Storage (CCS) imposes the construction of a sizeable CO2 pipeline infrastructure. This paper analyzes the conditions for a widespread adoption of CCS by a group of emitters that can be connected to a common pipeline system. It details a quantitative framework capable of assessing how the tariff structure and the regulatory constraints imposed on the pipeline operator impact the overall cost of CO2 abatement via CCS. This modeling framework is applied to the case of a real European CO2 pipeline project. We find that the obligation to use cross-subsidy-free pipeline tariffs has a minor impact on the minimum CO2 price required to adopt the CCS. In contrast, the obligation to charge non-discriminatory prices can either impede the adoption of CCS or significantly raises that price. Besides, we compared two alternative regulatory frameworks for CCS pipelines: a common European organization as opposed to a collection of national regulations. The results indicate that the institutional scope of that regulation has a limited impact on the adoption of CCS compared to the detailed design of the tariff structure imposed to pipeline operators.
|Date of creation:||2012|
|Contact details of provider:|| Postal: Department of Economics, Social Sciences Building, City University London, Whiskin Street, London, EC1R 0JD, United Kingdom,|
Phone: +44 (0)20 7040 8500
Web page: http://www.city.ac.uk
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Grimaud, André & Lafforgue, Gilles & Magné, Bertrand, 2011.
"Climate change mitigation options and directed technical change: A decentralized equilibrium analysis,"
Resource and Energy Economics,
Elsevier, vol. 33(4), pages 938-962.
- GRIMAUD Andre & LAFFORGUE Gilles & MAGNE Bertrand, 2009. "Climate change mitigation options and directed technical change: A decentralized equilibrium analysis," LERNA Working Papers 09.20.296, LERNA, University of Toulouse.
- André Grimaud & Gilles Lafforgue & Bertrand Magné, 2009. "Climate Change Mitigation Options and Directed Technical Change: A Decentralized Equilibrium Analysis," CESifo Working Paper Series 2875, CESifo Group Munich.
- Grimaud, André & Lafforgue, Gilles & Magné, Bertrand, 2009. "Climate Change Mitigation Options and Directed Technical Change: A Decentralized Equilibrium Analysis," TSE Working Papers 09-063, Toulouse School of Economics (TSE).
- Grimaud, André & Lafforgue, Gilles & Magné, Bertrand, 2008. "Climate Change Mitigation Options and Directed Technical Change: A Decentralized Equilibrium Analysis," IDEI Working Papers 510, Institut d'Économie Industrielle (IDEI), Toulouse, revised Nov 2009.
- GRIMAUD AndrÃ© & LAFFORGUE Gilles & MAGNE Bertrand, 2008. "Climate change mitigation options and directed technical change: A decentralized equilibrium analysis," LERNA Working Papers 08.10.254, LERNA, University of Toulouse.
- Baumol, William J, 1977. "On the Proper Cost Tests for Natural Monopoly in a Multiproduct Industry," American Economic Review, American Economic Association, vol. 67(5), pages 809-822, December.
- Roman Mendelevitch & Johannes Herold & Pao-Yu Oei & Andreas Tissen, 2010. "CO2 Highways for Europe: Modeling a Carbon Capture, Transport and Storage Infrastructure for Europe," Discussion Papers of DIW Berlin 1052, DIW Berlin, German Institute for Economic Research.
- Reyer Gerlagh & Bob van der Zwaan, 2006. "Options and Instruments for a Deep Cut in CO2 Emissions: Carbon Dioxide Capture or Renewables, Taxes or Subsidies?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 25-48.
- Baumol, William J & Bailey, Elizabeth E & Willig, Robert D, 1977. "Weak Invisible Hand Theorems on the Sustainability of Multiproduct Natural Monopoly," American Economic Review, American Economic Association, vol. 67(3), pages 350-365, June.
- Faulhaber, Gerald R, 1975. "Cross-Subsidization: Pricing in Public Enterprises," American Economic Review, American Economic Association, vol. 65(5), pages 966-977, December.
- Middleton, Richard S. & Bielicki, Jeffrey M., 2009. "A scalable infrastructure model for carbon capture and storage: SimCCS," Energy Policy, Elsevier, vol. 37(3), pages 1052-1060, March.
- Klokk, Ø. & Schreiner, P.F. & Pagès-Bernaus, A. & Tomasgard, A., 2010. "Optimizing a CO2 value chain for the Norwegian Continental Shelf," Energy Policy, Elsevier, vol. 38(11), pages 6604-6614, November.
- W.W. Sharkey, 1982. "Suggestions for a Game-Theoretic Approach to Public Utility Pricing and Cost Allocation," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 57-68, Spring.
- Regina Betz & Todd Sanderson & Tihomir Ancev, 2009.
"In or out? Efficient inclusion of installations in an emissions trading scheme,"
Environmental Economics Research Hub Research Reports
0928, Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University.
- Betz, Regina & Sanderson, Todd & Ancev, Tihomir, 2009. "In or Out: Efficient inclusion of installations in an Emissions Trading Scheme?," Research Reports 94877, Australian National University, Environmental Economics Research Hub.
- Kemp, Alexander G. & Sola Kasim, A., 2010. "A futuristic least-cost optimisation model of CO2 transportation and storage in the UK/UK Continental Shelf," Energy Policy, Elsevier, vol. 38(7), pages 3652-3667, July.
- Sandler, Todd & Tschirhart, John T, 1980. "The Economic Theory of Clubs: An Evaluative Survey," Journal of Economic Literature, American Economic Association, vol. 18(4), pages 1481-1521, December.
- S. C. Littlechild, 1975. "Common Costs, Fixed Charges, Clubs and Games," Review of Economic Studies, Oxford University Press, vol. 42(1), pages 117-124.
- Herzog, Howard J., 2011. "Scaling up carbon dioxide capture and storage: From megatons to gigatons," Energy Economics, Elsevier, vol. 33(4), pages 597-604, July.
- Andre, Jean & Bonnans, Frédéric & Cornibert, Laurent, 2009. "Optimization of capacity expansion planning for gas transportation networks," European Journal of Operational Research, Elsevier, vol. 197(3), pages 1019-1027, September.
- Massol, O., 2011. "A cost function for the natural gas transmission industry: further considerations," Working Papers 11/03, Department of Economics, City University London.
- Lohwasser, Richard & Madlener, Reinhard, 2012. "Economics of CCS for coal plants: Impact of investment costs and efficiency on market diffusion in Europe," Energy Economics, Elsevier, vol. 34(3), pages 850-863.
- Sorenson, John R. & Tschirhart, John T. & Whinston, Andrew B., 1978. "Private good clubs and the core," Journal of Public Economics, Elsevier, vol. 10(1), pages 77-95, August.
- Yang, Ming & Blyth, William & Bradley, Richard & Bunn, Derek & Clarke, Charlie & Wilson, Tom, 2008. "Evaluating the power investment options with uncertainty in climate policy," Energy Economics, Elsevier, vol. 30(4), pages 1933-1950, July.
When requesting a correction, please mention this item's handle: RePEc:cty:dpaper:12/10. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Research Publications Librarian)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.