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Carbon capture and sequestration: how much does this uncertain option affect near-term policy choices?

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  • Laurent Gilotte

    () (CIRED - Centre International de Recherche sur l'Environnement et le Développement - ENGREF - Ecole Nationale du Génie Rural, des Eaux et des Forêts - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Valentina Bosetti

    (FEEM - Fondazione Eni Enrico Mattei - Université de Lille, Sciences Humaines et Sociales)

Abstract

Policy makers as well as many economists recognize geological Carbon Capture and Sequestration (CCS) as a key option to avoid costly emission reduction. While an extreme perspective is to envision CCS as a magic bullet to solve the issue of climate change, the economics perspective is more balanced and see it as a part of a portfolio of mitigation actions. Besides, as any novel mitigation technology, CCS can be implemented with a twofold purpose; on one side it can substitute some other technological efforts to reach a given environmental target. On the other side, it offers the opportunity to go for additional emission reductions andreach a "safer" climate target. In order to balance these twopossible utilizations of CCS and assess their respective effects onearly policystrategies, we undertake a twofold numerical experiment. First, a cost-efficiency analysis is undertaken where CCS sole effect is substitution of other efforts. This is followed by a cost-benefit analysis where both purposes have to be balanced. We find that future availability of CCS is less a reason to relax near-term abatement efforts than what could be inferred from previous analyses. Moreover, cost-benefit analysis indicates that the environmental target should be more ambitious when CCS is included in the picture.

Suggested Citation

  • Laurent Gilotte & Valentina Bosetti, 2006. "Carbon capture and sequestration: how much does this uncertain option affect near-term policy choices?," CIRED Working Papers halshs-00007298, HAL.
  • Handle: RePEc:hal:ciredw:halshs-00007298
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00007298
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    References listed on IDEAS

    as
    1. Akimoto, Keigo & Tomoda, Toshimasa & Fujii, Yasumasa & Yamaji, Kenji, 2004. "Assessment of global warming mitigation options with integrated assessment model DNE21," Energy Economics, Elsevier, vol. 26(4), pages 635-653, July.
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    6. Pizer, William A., 2002. "Combining price and quantity controls to mitigate global climate change," Journal of Public Economics, Elsevier, vol. 85(3), pages 409-434, September.
    7. Jean Charles Hourcade & Philippe Ambrosi & Stéphane Hallegatte & Franck Lecocq & Patrice Dumas & Minh Ha-Duong, 2003. "Optimal control models and elicitation of attitudes towards climate damages," Post-Print halshs-00000966, HAL.
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    More about this item

    Keywords

    Climate Change; Uncertainty; Sequestration; Cost-benefit analysis; Changement climatique; Incertitudes; capture et séquestration du carbone; analyse coût-bénéfice; CO2;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q29 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Other

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