The influence of international climate policies on the deployment of CO2 capture and storage at the national level

Abstract

The deployment of large scale CO2 Capture and Storage (CCS) may depend largely on the emissions price resulting from a greenhouse gas emission trading system. However, it is unknown whether such a trading system leads to a sufficient high CO2 price and stable investment environment for CCS deployment. To gain more knowledge, we soft-linked WorldScan, an applied general equilibrium model for global policy analysis, with MARKAL-NL-UU, a techno-economic energy bottom-up model of the Dutch power generation sector and CO2 intensive industry. Results from WorldScan show that CO2 prices in 2020 could vary between 20 €/tCO2 in a GRAND COALITION scenario, in which all countries accept greenhouse gas targets from 2020, to 47 €/tCO2 in an IMPASSE scenario, in which EU-27 continues its one-sided emission trading system without the possibility to use the Clean Development Mechanism. Results from MARKAL-NL-UU show that an emission trading system in combination with uncertainty does not advance the application of CCS in an early stage, the rates at which different CO2 abatement technologies (including CCS) develop are less crucial for introduction of CCS than the CO2 price development, and the combination of biomass (co-)firing and CCS seems an important option to realise deep CO2 emission reductions.