Carbon capture: Storage vs. Utilization

Michel Moreaux, Jean-Pierre Amigues, Gerard van der Meijden and Cees Withagen
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Gerard van der Meijden: VU - Vrije Universiteit Amsterdam [Amsterdam], Tinbergen Institute - Tinbergen Institute
Cees Withagen: VU - Vrije Universiteit Amsterdam [Amsterdam], Tinbergen Institute - Tinbergen Institute

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Abstract: Carbon capture and storage in salt domes or in inactive fields is seen as an appealing option to meet the ambitious objectives of the Paris Agreement. Captured CO2 emissions can also be injected in active fields to enhance gas or oil recovery. We examine the optimal scale and timing of these different capturing and storage options in a dynamic model of an economy subject to a carbon budget. We consider the socially optimal outcome as well as the outcome under laissez-faire. The social optimum can have different forms depending on the initial carbon budget, the fossil fuel resource stock and the stock of already injected CO2 in active fields. The level and convexity of the costs of capturing, storing and producing renewable energy plays a role as well. We specify the conditions under which each possible sequence of regimes - no capturing, only enhanced recovery, only storage without enhanced recovery, a combination of both or only renewables - occurs. We quantify our analytical results by calibrating the model and running simulations.

Keywords: Global warming; Carbon capture and storage; Enhanced recovery; Non-renewable resources; Renewable resources (search for similar items in EconPapers)
Date: 2024-05
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Citations: View citations in EconPapers (2)

Published in Journal of Environmental Economics and Management, 2024, 125, pp.102976. ⟨10.1016/j.jeem.2024.102976⟩

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Journal Article: Carbon capture: Storage vs. Utilization (2024)
Working Paper: Carbon Capture: Storage vs. Utilization
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04643896

DOI: 10.1016/j.jeem.2024.102976

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