Pricing Contracts Under Uncertainty in a Carbon Capture and Storage Framework

W. Cai, D.I. Singham, E.M. Craparo and J.A. White

Energy Economics, 2014, vol. 43, issue C, 56-62

Abstract: Carbon capture and storage (CCS) has been demonstrated as a viable option for reducing carbon emissions to the atmosphere. We consider a situation where a tax on emissions is imposed on carbon dioxide (CO2) producers to encourage their participation in CCS. Operators of CO2 transportation pipelines and storage sites enter into individual contracts with emissions producers to store CO2. We study the problem of selecting the optimal price and volume of these contracts under both cost and emissions uncertainty to optimize the storage operator's expected profit.

Keywords: Carbon capture and storage; Pricing; Uncertainty quantification (search for similar items in EconPapers)
JEL-codes: C61 C72 D42 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:43:y:2014:i:c:p:56-62

DOI: 10.1016/j.eneco.2014.02.003

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