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Optimal Timing of Carbon Capture and Storage Policies - a Social Planner's View

Author

Listed:
  • Yiwen Chen

    (Université du Luxembourg (Extramural Research Fellow))

  • Xi Wan

    (Nanjing Audit University)

  • Benteng Zou

    (Université du Luxembourg)

Abstract

"Carbon capture and storage (CCS) is considered one of the most realistic and plausi- " ble options for reducing greenhouse gas (GHG) emissions from large pollution sources. However, CCS deployment is costly. This paper considers the social cost of CCS projects and GHG damage from a central planer's point of view, providing clear in- formation about when each player should deploy CCS. The findings are twofold: (1) given the heterogeneity of players, it is not socially optimal for all players to start CCS projects at the same time; instead, the player that has a cost advantage should start first; (2) it may be socially desirable for the player with a cost disadvantage never starts CCS. We show the conditions that support both possibilities. The second find- ing provides a clear policy guideline for the decision-maker: reduce the costs of the high-cost player in order to reduce global GHG emissions, provided that is the aim of the supranational institute.

Suggested Citation

  • Yiwen Chen & Xi Wan & Benteng Zou, 2022. "Optimal Timing of Carbon Capture and Storage Policies - a Social Planner's View," DEM Discussion Paper Series 22-12, Department of Economics at the University of Luxembourg.
    • Handle: RePEc:luc:wpaper:22-12
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    File URL: http://hdl.handle.net/10993/51993
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    Cited by:

    1. is not listed on IDEAS
    2. Yiwen Chen & Nora Paulus & Xi Wan & Benteng Zou, 2024. "To Deploy or Not to Deploy CCS Abatement, and When : A Differential Game Perspective," DEM Discussion Paper Series 24-07, Department of Economics at the University of Luxembourg.
    3. Hoel, Michael Olaf, 2025. "The path to net zero emissions," Journal of Environmental Economics and Management, Elsevier, vol. 132(C).
    4. Han, Thi Thanh Tam & Lin, Ching-Yang, 2025. "Exploring long-run CO2 emission patterns and the environmental kuznets curve with machine learning methods," Innovation and Green Development, Elsevier, vol. 4(1).

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    Keywords

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    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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