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Pricing and Policy for Carbon Capture and Sequestration with Learning by Doing

25 Pages Posted: 18 Nov 2008  

David Nissen

Columbia University - Center for Energy, Marine Transportation and Public Policy

Date Written: November 16, 2008

Abstract

This paper derives the efficient tax-subsidy policy in an energy-economy-environment growth model with carbon emission externalities, and a carbon capture and sequestration (CCS) sector with learning by doing (LBD) externalities. First we derive the socially optimum pricing, quantities, cashflows, and valuation. Then we derive the government tax-subsidy policies for carbon emissions and CCS that support socially efficient economic behavior with a competitive CCS industry. The Social Accounting Matrix for supporting institutional structure is derived. We analyze the qualitative dynamics of the time paths of emissions and CCS and of pricing for atmospheric carbon, sequestration capacity, and LBD.

Keywords: Energy, environment, energy-economy growth model, carbon sequestration, learning by doing

Suggested Citation

Nissen, David, Pricing and Policy for Carbon Capture and Sequestration with Learning by Doing (November 16, 2008). USAEE Working Paper No. 08-013. Available at SSRN: https://ssrn.com/abstract=1302578 or http://dx.doi.org/10.2139/ssrn.1302578

David Nissen (Contact Author)

Columbia University - Center for Energy, Marine Transportation and Public Policy ( email )

New York, NY
United States

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