Optimal Timing of Carbon Capture and Storage Policies - a Social Planner's View

Yiwen Chen, Xi Wan () and Benteng Zou
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Yiwen Chen: Université du Luxembourg (Extramural Research Fellow)
Xi Wan: Nanjing Audit University

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: "Carbon capture and storage (CCS) is considered one of the most realistic and plausi- " ble options for reducing greenhouse gas (GHG) emissions from large pollution sources. However, CCS deployment is costly. This paper considers the social cost of CCS projects and GHG damage from a central planer's point of view, providing clear in- formation about when each player should deploy CCS. The findings are twofold: (1) given the heterogeneity of players, it is not socially optimal for all players to start CCS projects at the same time; instead, the player that has a cost advantage should start first; (2) it may be socially desirable for the player with a cost disadvantage never starts CCS. We show the conditions that support both possibilities. The second find- ing provides a clear policy guideline for the decision-maker: reduce the costs of the high-cost player in order to reduce global GHG emissions, provided that is the aim of the supranational institute.

Keywords: Carbon capture and storage; multistage optimal control; optimal timing. (search for similar items in EconPapers)
JEL-codes: C61 Q54 Q58 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-ene and nep-env
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http://hdl.handle.net/10993/51993 (application/pdf)

Related works:
Journal Article: Optimal timing of carbon capture and storage policies — A social planner’s view (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:22-12

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