Carbon Capture and Storage as a Decarbonisation Strategy: Empirical Evidence and Policy Implications for Sustainable Development

Maxwell Kongkuah (), Noha Alessa and Ilham Haouas
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Maxwell Kongkuah: Department of Economics, Faculty of Political Sciences, Canakkale Onsekiz Mart University, 17100 Canakkale, Turkey
Noha Alessa: Department of Accounting, College of Business Administration, Princess Nourah bint Abdulrahman University, P.O. Box 84428, Riyadh 11671, Saudi Arabia
Ilham Haouas: Abu Dhabi University, College of Business, Abu Dhabi P.O. Box 59911, United Arab Emirates

Sustainability, 2025, vol. 17, issue 13, 1-22

Abstract: This paper examines the impact of carbon capture and storage (CCS) deployment on national carbon intensity (CI) across 43 countries from 2010 to 2020. Using a dynamic common correlated effects (DCCE) log–log panel, we estimate the elasticity of CI with respect to sectoral CCS facility counts within four income-group panels and the full sample. In the high-income panel, CCS in direct air capture, cement, iron and steel, power and heat, and natural gas processing sectors produces statistically significant CI declines of 0.15%, 0.13%, 0.095%, 0.092%, and 0.087% per 1% increase in facilities, respectively (all p < 0.05). Upper-middle-income countries exhibit strong CI reductions in direct air capture (–0.22%) and cement (–0.21%) but mixed results in other sectors. Lower-middle- and low-income panels show attenuated or positive elasticities—reflecting early-stage CCS adoption and infrastructure barriers. Robustness checks confirm these patterns both before and after the 2015 Paris Agreement and between emerging and developed economy panels. Spatial analysis reveals that the United States and United Kingdom achieved 30–40% CI reductions over the decade, whereas China, India, and Indonesia realized only 10–20% declines (relative to a 2010 baseline), highlighting regional deployment gaps. Drawing on these detailed income-group insights, we propose tailored policy pathways: in high-income settings, expand tax credits and public–private infrastructure partnerships; in upper-middle-income regions, utilize blended finance and technology-transfer programs; and in lower-income contexts, establish pilot CCS hubs with international support and shared storage networks. We further recommend measures to manage CCS’s energy and water penalties, implement rigorous monitoring to mitigate leakage risks, and design risk-sharing contracts to address economic uncertainties.

Keywords: carbon capture and storage (CCS); carbon intensity; climate change mitigation; emission reduction; sustainable development (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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