Providing adequate economic incentives for bioenergies with CO2 capture and geological storage

Olivia Ricci ()

Energy Policy, 2012, vol. 44, issue C, 362-373

Abstract: Knowing that carbon capture and storage (CCS) could play an important role in reducing emissions, it is important to have a good understanding of this role and the importance of environmental policies to support carbon capture and geological storage from bioenergies (BECCS). To date CCS technologies are not deployed on a commercial level, and policy instruments should be used to provide incentives to firms to use these technologies to reduce pollution. The aim of this paper is to compare the cost-efficiency of several incentive-based instruments (a fossil fuel tax, an emissions tax, a cap and trade system, and a subsidy on captured emissions) needed to spur the adoption of CCS and BECCS, using a dynamic general equilibrium model. This type of model has become the standard for assessing economy-wide impacts of environmental and technological policies. The study shows that BECCS will be deployed only if a specific subsidy per unit of biomass emissions captured with a CCS technology is available. We show also that the two most cost-efficient instruments for achieving a given emissions reduction target are a specific subsidy that rewards captured emissions and a carbon tax whose revenues are recycled to subsidize BECCS.

Keywords: Bioenergies with carbon capture and storage; Dynamic computable general equilibrium model; Economic instruments efficiency (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (18)

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Related works:
Working Paper: Providing adequate economic incentives for bioenergies with CO2 capture and geological storage (2011)
Working Paper: Providing adequate economic incentives for bioenergies with CO2 capture and geological storage (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:44:y:2012:i:c:p:362-373

DOI: 10.1016/j.enpol.2012.01.066

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