Is Carbon Capture and Storage Socially Desirable under a Net-Zero Emission Target?

"Achieving Net-Zero emissions by 2050, in line with the Paris Agreement, has emerged as a binding constraint for climate policy, yet most dynamic models treat carbon neutrality as an endogenous outcome. This paper studies the role of Carbon Capture and Storage (CCS), as a representative case of abatement under terminal constraints, when the deadline for reaching the net-zero target (T) is exogenously fixed. We derive a closed-form welfare criterion that compares CCS-based and renewable-only transition pathways through the difference in inherited pollution damages at T. This criterion delivers policy-relevant results along three dimensions: (i) the net-zero date; (ii) learning-by-doing effects on CCS cost trajectories; and (iii) storage capacity requirements needed for CCS to remain welfare-desirable. Using a linear–quadratic framework calibrated to different target dates, we show that CCS dominates a renewable-only pathway whenever its transition period welfare gains are large enough to offset the higher post-transition climate damages it generates relative to renewables. We therefore derive a general welfare criterion linking transition emissions to terminal carbon stock under an exogenously imposed net-zero constraint. Our results provide decision-relevant thresholds for net-zero planning, complementing recent work on the timing of CCS deployment and the feasibility of negative emissions."