Climate Change, Carbon Sequestration, and Property Rights

Abstract:     
This Article considers the role of property rights in efforts to sequester underground hundreds of millions of tons of carbon dioxide (CO2) per year from power plants and other industrial facilities in order to mitigate climate change. This technology, known as carbon capture and sequestration (CCS), could provide deep emission cuts, particularly from coal power generation, on a worldwide basis. In order to implement this technology, future CCS operators must be able to access hundreds of millions of acres of "pore space" roughly a kilometer below the earth's surface in which to store CO2 for hundreds to thousands of years. Here, we explore questions relating to ownership of subsurface pore space, physical takings, regulatory takings, and just compensation that will necessarily accompany the implementation of CCS in the United States. In order to accommodate the full range of property rights and takings issues that will arise with CCS, we propose a regulatory framework based in part on the Natural Gas Act to address these issues in connection with subsurface CO2 storage.

Keywords: climate change, carbon sequestration, carbon storage, geologic carbon sequestration, property rights, fifth amendment, takings, physical takings, regulatory takings, natural gas act, underground waste injection, secondary oil and gas recovery

JEL Classifications: K11, K13, K32, K41, Q2, Q3, Q4

Accepted Paper Series