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Estimation of Property Value Changes from Nearby Carbon Capture, Utilization, and Storage Projects in the United States

Author

Listed:
  • Kaifang Luo
  • Yueming Lucy Qiu
  • Pengfei Liu
  • Yingdan Mei

Abstract

Carbon capture, utilization, and storage (CCUS) techniques are vital to decarbonization goals. A CCUS supply chain captures CO₂ and delivers it to a suitable location where CO₂ can either be used or injected deep underground for long-term storage. CCUS projects reduce carbon emissions but also pose certain risks to local communities. Using nationwide CCUS data combined with property-level transaction records from 1990 to 2021 in the U.S., we quantify the net impact of proximity to CCUS projects on nearby housing prices in light of their positive and negative externalities. The results show that proximity to CCUS projects leads to a price premium on nearby house sales prices, but such effects disappear beyond the 4.2-km buffer. Compared to homes without CCUS projects nearby, houses with CCUS projects within 4.2 km typically command a price premium of 3.90% (or $8,582). CCUS deployment could be facilitated with a more detailed explanation of the housing price premium. The observed increase in property values near CCUS operations in the U.S. provides insights that could inform CCUS project development in other regions, though local regulatory and socio-economic factors must be carefully considered.

Suggested Citation

  • Kaifang Luo & Yueming Lucy Qiu & Pengfei Liu & Yingdan Mei, 2024. "Estimation of Property Value Changes from Nearby Carbon Capture, Utilization, and Storage Projects in the United States," NBER Working Papers 32713, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32713
    Note: EEE
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    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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