Incentives for early adoption of carbon capture technology: Further considerations from a European perspective

Albert Banal-Estanol, Jeremy Eckhause and Olivier Massol
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Jeremy Eckhause: RAND Corp - RAND Corp

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Abstract: This note details two comments on a recent policy proposal in Comello and Reichelstein (2014) aimed at favoring the early adoption of Carbon Capture (CC) technology in the next generation of thermal-based power plants to be installed in the United States. First, we examine the implications of a worst-case scenario in which no new CC is adopted internationally beyond what is in place in 2014. Second, we show the potential, under the original proposed subsidy, for the emergence of coordination failures capable of hampering the desired early CC deployment. We propose and evaluate modified schedules of tax-credits sufficient to overcome these concerns. These additions strengthen the argument in the original article: namely, though higher incentive levels are necessary, our findings confirm that the cost of the proposed policy is not out of reach.

Keywords: Tax incentives; Carbon Capture and Storage; Learning effects; Levelized cost; Coordination failure (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-ene, nep-env, nep-ino and nep-reg
Note: View the original document on HAL open archive server: https://hal.science/hal-01297599
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Citations: View citations in EconPapers (4)

Published in Energy Policy, 2016, 90, pp.246-252. ⟨10.1016/j.enpol.2015.12.006⟩

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Working Paper: Incentives for early adoption of carbon capture technology: further considerations from a European perspective (2015)
Working Paper: Incentives for early adoption of carbon capture technology: further considerations from a European perspective (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01297599

DOI: 10.1016/j.enpol.2015.12.006

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