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

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  • Ricci, Olivia

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.

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  • Ricci, Olivia, 2012. "Providing adequate economic incentives for bioenergies with CO2 capture and geological storage," Energy Policy, Elsevier, vol. 44(C), pages 362-373.
  • Handle: RePEc:eee:enepol:v:44:y:2012:i:c:p:362-373
    DOI: 10.1016/j.enpol.2012.01.066
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    3. Vögele, Stefan & Rübbelke, Dirk, 2013. "Decisions on investments in photovoltaics and carbon capture and storage: A comparison between two different greenhouse gas control strategies," Energy, Elsevier, vol. 62(C), pages 385-392.
    4. Rübbelke, Dirk & Vögele, Stefan, 2013. "Effects of carbon dioxide capture and storage in Germany on European electricity exchange and welfare," Energy Policy, Elsevier, vol. 59(C), pages 582-588.
    5. Pour, Nasim & Webley, Paul A. & Cook, Peter J., 2018. "Opportunities for application of BECCS in the Australian power sector," Applied Energy, Elsevier, vol. 224(C), pages 615-635.
    6. Haro, Pedro & Aracil, Cristina & Vidal-Barrero, Fernando & Ollero, Pedro, 2015. "Rewarding of extra-avoided GHG emissions in thermochemical biorefineries incorporating Bio-CCS," Applied Energy, Elsevier, vol. 157(C), pages 255-266.
    7. Ricci, Olivia & Selosse, Sandrine, 2013. "Global and regional potential for bioelectricity with carbon capture and storage," Energy Policy, Elsevier, vol. 52(C), pages 689-698.
    8. Zhang, Zhaoguo & Jin, Xiaocui & Yang, Qingxiang & Zhang, Yi, 2013. "An empirical study on the institutional factors of energy conservation and emissions reduction: Evidence from listed companies in China," Energy Policy, Elsevier, vol. 57(C), pages 36-42.
    9. Zhang, Kun & Wang, Qian & Liang, Qiao-Mei & Chen, Hao, 2016. "A bibliometric analysis of research on carbon tax from 1989 to 2014," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 297-310.
    10. Brenda H. M. Silveira & Hirdan K. M. Costa & Edmilson M. Santos, 2023. "Bioenergy with Carbon Capture and Storage (BECCS) in Brazil: A Review," Energies, MDPI, vol. 16(4), pages 1-18, February.
    11. Tarufelli, Brittany & Snyder, Brian & Dismukes, David, 2021. "The Potential Impact of the U.S. Carbon Capture and Storage Tax Credit Expansion on the Economic Feasibility of Industrial Carbon Capture and Storage," Energy Policy, Elsevier, vol. 149(C).
    12. Budzianowski, Wojciech M. & Budzianowska, Dominika A., 2015. "Economic analysis of biomethane and bioelectricity generation from biogas using different support schemes and plant configurations," Energy, Elsevier, vol. 88(C), pages 658-666.
    13. Wähling, Lara-Sophie & Fridahl, Mathias & Heimann, Tobias & Merk, Christine, 2023. "The sequence matters: Expert opinions on policy mechanisms for bioenergy with carbon capture and storage," Open Access Publications from Kiel Institute for the World Economy 275739, Kiel Institute for the World Economy (IfW Kiel).
    14. Lomax, Guy & Workman, Mark & Lenton, Timothy & Shah, Nilay, 2015. "Reframing the policy approach to greenhouse gas removal technologies," Energy Policy, Elsevier, vol. 78(C), pages 125-136.
    15. Yi, Qun & Zhao, Yingjie & Huang, Yi & Wei, Guoqiang & Hao, Yanhong & Feng, Jie & Mohamed, Usama & Pourkashanian, Mohamed & Nimmo, William & Li, Wenying, 2018. "Life cycle energy-economic-CO2 emissions evaluation of biomass/coal, with and without CO2 capture and storage, in a pulverized fuel combustion power plant in the United Kingdom," Applied Energy, Elsevier, vol. 225(C), pages 258-272.
    16. Fridahl, Mathias, 2017. "Socio-political prioritization of bioenergy with carbon capture and storage," Energy Policy, Elsevier, vol. 104(C), pages 89-99.
    17. Jérôme Hilaire & Jan C. Minx & Max W. Callaghan & Jae Edmonds & Gunnar Luderer & Gregory F. Nemet & Joeri Rogelj & Maria Mar Zamora, 2019. "Negative emissions and international climate goals—learning from and about mitigation scenarios," Climatic Change, Springer, vol. 157(2), pages 189-219, November.

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