Optimal timing of carbon sequestration policies

Abstract

Carbon capture and storage (CCS) is one of the most promising abatement options to curb CO2 emissions of the energy sector. Usually, in models where the atmospheric carbon stock is constrained to not exceed a given ceiling and under constant average costs, it is never optimal to deploy CCS before the time at which this ceiling is reached. In this paper, we show that, when the CCS technology is submitted to decreasing returns to scale, abatement activities must begin earlier, i.e. before the climate constraint binds. It must also cease strictly before the end of the ceiling period.

Replaces

Jean-Pierre Amigues, Gilles Lafforgue, and Michel Moreaux, “Optimal capture and sequestration from the carbon emission flow and from the atmospheric carbon stock with heterogeneous energy consuming sectors”, TSE Working Paper, n. 10-163, February 11, 2010.

Reference

Jean-Pierre Amigues, Gilles Lafforgue, and Michel Moreaux, “Optimal timing of carbon sequestration policies”, Economics Bulletin, vol. 35, n. 4, October 2015, pp. 2242–2251.