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

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 it can either be used or injected deep underground for long-term storage. CCUS projects reduce carbon emissions but also pose a risk to geological formations and underground water quality. Our analysis examines how local communities perceive the net impact of CCUS projects in light of their positive and negative externalities. 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. The results show that proximity to CCUS projects results in 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 3.99% (or $9,332). The increase in property value after CCUS operations can encourage the development of CCUS projects globally on a larger scale. CCUS deployment could be facilitated with a more detailed explanation of the housing price premium.

Keywords: CCUS; carbon capture; carbon storage; housing prices

JEL Classification: Q42, Q52, Q54, R21