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Carbon capture: Storage vs. Utilization

Author

Listed:
  • Michel Moreaux

    (TSE-R - TSE-R Toulouse School of Economics – Recherche - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Jean-Pierre Amigues

    (TSE-R - TSE-R Toulouse School of Economics – Recherche - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Gerard van der Meijden

    (VU - Vrije Universiteit Amsterdam [Amsterdam], Tinbergen Institute - Tinbergen Institute)

  • Cees Withagen

    (VU - Vrije Universiteit Amsterdam [Amsterdam], Tinbergen Institute - Tinbergen Institute)

Abstract
Carbon capture and storage in salt domes or in inactive fields is seen as an appealing option to meet the ambitious objectives of the Paris Agreement. Captured CO2 emissions can also be injected in active fields to enhance gas or oil recovery. We examine the optimal scale and timing of these different capturing and storage options in a dynamic model of an economy subject to a carbon budget. We consider the socially optimal outcome as well as the outcome under laissez-faire. The social optimum can have different forms depending on the initial carbon budget, the fossil fuel resource stock and the stock of already injected CO2 in active fields. The level and convexity of the costs of capturing, storing and producing renewable energy plays a role as well. We specify the conditions under which each possible sequence of regimes - no capturing, only enhanced recovery, only storage without enhanced recovery, a combination of both or only renewables - occurs. We quantify our analytical results by calibrating the model and running simulations.

Suggested Citation

  • Michel Moreaux & Jean-Pierre Amigues & Gerard van der Meijden & Cees Withagen, 2024. "Carbon capture: Storage vs. Utilization," Post-Print hal-04643896, HAL.
    • Handle: RePEc:hal:journl:hal-04643896
    DOI: 10.1016/j.jeem.2024.102976
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    Cited by:

    1. 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.

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    More about this item

    Keywords

    Global warming; Carbon capture and storage; Enhanced recovery; Non-renewable resources; Renewable resources;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • Q35 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Hydrocarbon Resources
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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