 Carbon capture and storage investment strategy towards the dual carbon goalsYiling Ouyang and Jian Guo Journal of Asian Economics, 2022, vol. 82, issue C Abstract: This paper develops a real option model combined with the Monte Carlo simulation to analyze the impact of the “dual carbon goals” on the CCS investment timing in China. The trajectory of CO2 prices is predicted to follow a geometric Brownian motion with jump. The CO2 prices are predicted on the basis of three scenarios: high, medium, and low shocks, respectively. Furthermore, the real option method is adopted to derive the appropriate incentive schemes and corresponding target CO2 prices that sustain CCS operations to assist China’s dual carbon goals. Notably, portfolios of two government incentive policies are compared, including clean electricity tariff and carbon tax. The results show that building an efficient national carbon emissions trading scheme (ETS) is crucial to catalyzing the deployment of CCS technology, shortening the waiting time of CCS investment to 5.9 years at best. Government incentives could further bring the threshold CO2 prices down and the expected waiting time of CCS investment forward. Keywords: Carbon capture and storage investment; Dual carbon goals; Government incentives; Investment timing (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:82:y:2022:i:c:s1049007822000835 DOI: 10.1016/j.asieco.2022.101527 Access Statistics for this article Journal of Asian Economics is currently edited by C. Wiemer More articles in Journal of Asian Economics from Elsevier |
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