Economics of Carbon Capture and Storage

Abstract

Human-engineered capture of CO2 emissions at the point source and subsequent long- term storage of this CO2 underground represent a potential mitigation strategy for global warming. The so-called carbon capture and storage (CCS) projects are technically feasible but have not been well established from an economic efficiency perspective. This chapter uses economic theory to describe the costs, benefits, and economically efficient level of CCS provision. Achieving the economically efficient level of CCS provision requires consider- ation of both the private and public costs and benefits of CCS and will also likely require some degree of government intervention in the form of economic incentives and/or direct regulation.