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Comparative Analysis of Carbon Capture and Storage Finance Gaps and the Social Cost of Carbon

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  • Amanda Harker Steele

    (National Energy Technology Laboratory (NETL), Site Support Contractor, 3610 Collins Ferry Road, P.O. Box 880, Morgantown, WV 26505, USA)

  • Travis Warner

    (NETL, Site Support Contractor, 626 Cochrans Mill Road, P.O. Box 10940, Pittsburgh, PA 15236, USA)

  • Derek Vikara

    (NETL, Site Support Contractor, 626 Cochrans Mill Road, P.O. Box 10940, Pittsburgh, PA 15236, USA)

  • Allison Guinan

    (NETL, Site Support Contractor, 626 Cochrans Mill Road, P.O. Box 10940, Pittsburgh, PA 15236, USA)

  • Peter Balash

    (NETL, Economist, 626 Cochrans Mill Road, P.O. Box 10940, Pittsburgh, PA 15236, USA)

Abstract

This paper evaluates how changes in economic market and policy conditions, including the establishment of a per-unit tax on unabated emissions of carbon dioxide (CO 2 ) set equal to estimates of the social cost of carbon (SCC), influence the economics of carbon capture and storage (CCS) for two hypothetical power generation facilities located in the United States. Data are provided from modified versions of models and resources created and managed by the National Energy Technology Laboratory. Changes in economic market and policy conditions are evaluated over a series of scenarios in which differences in the levelized cost of electricity (LCOE) provide estimates of the financial gap necessary to overcome for CCS to be considered the cost-minimizing choice for each power generation facility type considered. Results suggest that for the coal and natural gas power generation facilities considered, a per-unit tax set equal to an SCC exceeding $123 per metric ton of CO 2 (/tCO 2 ) emitted (2018 dollars) and $167/tCO 2 emitted, respectively, in combination with current Section 45Q tax credits, yields investment in CCS as the cost-minimizing choice; SCC values as low as $58/tCO 2 and $98/tCO 2 can make CCS the cost-minimizing choice with additional support policies (e.g., free transportation and storage options).

Suggested Citation

  • Amanda Harker Steele & Travis Warner & Derek Vikara & Allison Guinan & Peter Balash, 2021. "Comparative Analysis of Carbon Capture and Storage Finance Gaps and the Social Cost of Carbon," Energies, MDPI, vol. 14(11), pages 1-24, May.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:11:p:2987-:d:559358
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    References listed on IDEAS

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    1. Steve Newbold & Charles Griffiths & Christopher C. Moore & Ann Wolverton & Elizabeth Kopits, 2010. "The "Social Cost of Carbon" Made Simple," NCEE Working Paper Series 201007, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Aug 2010.
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    3. Stéphane Zuber & Marc Fleurbaey & Maddalena Ferranna & Mark Budolfson & Francis Dennig & Kian Mintz-Woo & Robert Socolow & Dean Spears, 2019. "The Social Cost of Carbon: Valuing Inequality, Risk, and Population for Climate Policy," Post-Print halshs-02400609, HAL.
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    5. Pavel Tcvetkov, 2021. "Climate Policy Imbalance in the Energy Sector: Time to Focus on the Value of CO 2 Utilization," Energies, MDPI, vol. 14(2), pages 1-22, January.
    6. Laurie Johnson & Chris Hope, 2012. "The social cost of carbon in U.S. regulatory impact analyses: an introduction and critique," Journal of Environmental Studies and Sciences, Springer;Association of Environmental Studies and Sciences, vol. 2(3), pages 205-221, September.
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    Cited by:

    1. Azam Ghezelbash & Vahid Khaligh & Seyed Hamed Fahimifard & J. Jay Liu, 2023. "A Comparative Perspective of the Effects of CO 2 and Non-CO 2 Greenhouse Gas Emissions on Global Solar, Wind, and Geothermal Energy Investment," Energies, MDPI, vol. 16(7), pages 1-20, March.

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