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Optimal Carbon Sequestration Policies in Leaky Reservoirs

Author

Listed:
  • Jean-Marie Alain

    (INRIA and UMR LIRMM)

  • Michel Moreaux

    (Toulouse School of Economics, IDEI and LERNA)

  • Mabel Tidball

    () (INRA and UMR LAMETA)

Abstract

We study in this report a model of optimal Carbon Capture and Storage in which the reservoir of sequestered carbon is leaky, and pollution eventually is released into the atmosphere. We formulate the social planner problem as an optimal control program and we describe the optimal consumption paths as a function of the initial conditions, the physical constants and the economic parameters. In particular, we show that the presence of leaks may lead to situations which do not occur otherwise, including that of non-monotonous price paths for the energy.

Suggested Citation

  • Jean-Marie Alain & Michel Moreaux & Mabel Tidball, 2014. "Optimal Carbon Sequestration Policies in Leaky Reservoirs," Working Papers 2014.11, FAERE - French Association of Environmental and Resource Economists.
  • Handle: RePEc:fae:wpaper:2014.11
    as

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    File URL: http://faere.fr/pub/WorkingPapers/Jean-Marie_Moreaux_Tidball_FAERE_WP2014.11.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    carbon sequestration and storage; optimal control.;

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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