24 Nov 2017

Will carbon capture and storage work?

Neomi writes*

With an ever-increasing demand for energy combined with a pressing need to lower greenhouse emissions, governments, companies, and scientists have been investing a lot of time and research into methods which could provide a clean and secure energy supply for the future. During the beginning of the 21st century, researchers from MIT first coined the term carbon sequestration and storage. From there on, carbon capture and storage (CCS) technologies caught the eye of many governments and institutions, such as the Intergovernmental Panel on Climate Change (IPCC). Basically, CCS is a process that seeks to ‘vacuum’ the carbon dioxide emitted by the burning of fossil fuels or large industrial plants to store it over a long period of time. As a concept, CCS is brilliant, it implies that we could virtually move on to an emission-less future. Sadly, in reality, there are many caveats with this technology. Some examples of these are the long-term effects of geological storage, or the large-scale change in industrial infrastructure needed. For the purpose of this post, I will focus on the main and most straight-forward issue of CCS: the large amounts of energy needed to extract, transport and store the CO2.

Although at this moment the costs of CCS are still relatively high, many predictions based on CCS assume that cost of production and deployment will be significantly lowered by Economies of Scale. According to the IPCC (pdf), due to how energy intensive CCS is, electricity prices are expected to rise “$0.01–0.05 per kilowatt hour” once CCS is a readily available technology. As figure 1 conveys, the demand for electricity in today’s markets is highly inelastic, which can be explained by the heavy reliance of societies functioning on energy. Said inelasticity of the demand makes the changes in quantity demanded not as responsive to price changes, meaning that an increase in price (shown by the shift of the supply curve upwards) will have a proportionally smaller decrease in quantity demanded. This difference is indicated by the green and purple boxes.

Figure 1: (Oversimplified) supply and demand for electricity with CCS

Economically, the costs of CCS seem to be easily identifiable, but a question still remains unanswered: is it actually worth it? In order to answer this question, we must familiarize ourselves with a concept known as the social cost of carbon (SCC). The Environmental Protection Agency defines SCC as a “measure, in dollars, of the long-term damage done by a ton of carbon dioxide." Currently, we are approaching a $42 cost per tonne of carbon emitted. If we compare this number to how much it costs to sequester one tonne of carbon, which is estimated at about $130, capturing 1 tonne of CO2 is almost 3 times more expensive than the damage caused by one tonne of carbon. According to these numbers, sequestering one tonne of carbon is much more expensive than just paying for the damage that the same tonne would cause. Figures like these are what deter many potential users from implementing this technology. The elevated cost of the CCS procedure is one of the main reasons why many people are skeptical about its mitigation potential.

Bottom-line: The real question here is: for how much longer will our environment be able to afford 1 tonne of carbon being emitted into our atmosphere? I doubt that paying $42 per tonne emitted will mitigate the actual effects of that CO2 in the environment. An ideal scenario would be supplying electricity through energy production methods that do not emit carbon at all. Sadly, most of the non-conventional renewable energy sources employed today cannot meet the real-time demands of the grid due to their heavy reliance on climate and weather, which are highly fluctuating factors. Until the intermittency issues of clean renewables are solved, CCS might be the only way of meeting the high energy demands in a relatively ‘green’ fashion.

* Please help my environmental economics students by commenting on unclear analysis, other perspectives, data sources, etc. (Or you can just say something nice :)


  1. You say, "I doubt that paying $42 per tonne emitted will mitigate the actual effects of that CO2 in the environment." Is that any different from saying that you think $42 is an underestimate of the true social cost of carbon?

    1. I belive $42 is an underestimate of the social cost of carbon (SCC) when SCC is defined as the monetary quantification of the damage caused by a tonne of carbon.

  2. Hey Neomi, very interesting post!! I was wondering, in concruence with what Ed said, about the environmental cost of carbon - do I interpret you correctly in that as you are solely looking at the current 'economic' side of carbon, you find the value for the extra carbon we emit being stored via CCS of invaluable benefit to environment and society?

  3. Hey Neomi, interesting topic! In the Netherlands, the government has a so called "SDE+" (Stimulation Sustainable Energy Production) subsidy, that it grants to corporations and non-profit institutions that want to shift to the use of renewable energy. The new government, however, has decided to use some money that was originally meant for this subsidy, to subsidize Dutch organizations that want to employ CCS, in order for The Netherlands to meet the standards and goals of the Paris Agreement by 2030. Do you think that this shift of subsidy from renewable energy to CCS technology is a useful and worthwhile? Or is it only in the short term, while having costs in the long term? Since choosing on which technology to spend this money, is based on opportunity costs, both in the near and far future, which makes this a very interesting topic, I think!

  4. https://energeia.nl/energeia-artikel/40062504/wiebes-ccs-kan-inderdaad-niet-uit-de-sde-gefinancierd-worden.
    Here is the article I was talking about in class. The SDE+ decided not to allocate funds away from renewables into CCS as of Friday last week. I personally do believe that CCS has a promising future in manufacturing processes and some sources of energy production, but I am not sure how ready this technology is for mass deployment yet. I'm not sure how feasible achieving the 2030 goals is, but I think it is a technology that will be needed in the future.


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