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

Author

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  • Laurent Gilotte

    (CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Valentina Bosetti

    (FEEM - Fondazione Eni Enrico Mattei [Milano])

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?," Working Papers halshs-00007298, HAL.
  • Handle: RePEc:hal:wpaper:halshs-00007298
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00007298
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    References listed on IDEAS

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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;
    All these keywords.

    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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