Carbon Capture and Storage at Scale: Lessons from the Growth of Analogous Energy Technologies

Energy Policy, Vol. 38, pp. 4089–4098, 2009

20 Pages Posted: 6 May 2009 Last revised: 28 Aug 2012

Varun Rai

University of Texas at Austin - LBJ School of Public Affairs

David G. Victor

UC San Diego, School of Global Policy and Strategy

Mark C. Thurber

Stanford University - Program on Energy and Sustainable Development

Date Written: February 1, 2009

Abstract

Carbon capture and storage (CCS) is a promising technology that might allow for significant reductions in CO2 emissions. But at present CCS is very expensive and its performance is highly uncertain at the scale of commercial power plants. Such challenges to deployment, though, are not new to students of technological change. Several successful technologies, including energy technologies, have faced similar challenges as CCS faces now. In this paper we draw lessons for the CCS industry from the history of other energy technologies that, as with CCS today, were risky and expensive early in their commercial development. Specifically, we analyze the development of the US nuclear-power industry, the US SO2-scrubber industry, and the global LNG industry.

We focus on three major questions in the development of these analogous industries. First, we consider the creation of the initial market to prove the technology: how and by whom was the initial niche market for these industries created? Second, we look at how risk-reduction strategies for path-breaking projects allowed the technology to evolve into a form so that it could capture a wider market and diffuse broadly into service. Third, we explore the "learning curves" that describe the cost reduction as these technologies started to capture significant market share.

Our findings suggest that directly applying to CCS the conventional wisdom that is prevalent regarding the deployment and diffusion of technologies can be very misleading. The conventional wisdom may be summarized as: "Technologies are best deployed if left in the hands of private players"; "Don't pick technology winners" or "Technology forcing is wrong"; and "Technology costs reduce as its cumulative installed capacity increases". We find that none of these readily applies when thinking about deployment of CCS.

Keywords: CCS, Carbon Capture and Storage, Technology Policy, Technology Diffusion, Climate change policy, Technological innovation

JEL Classification: L11, L50, L94, L98, O33, O38

Suggested Citation

Rai, Varun and Victor, David G. and Thurber, Mark C., Carbon Capture and Storage at Scale: Lessons from the Growth of Analogous Energy Technologies (February 1, 2009). Energy Policy, Vol. 38, pp. 4089–4098, 2009. Available at SSRN: https://ssrn.com/abstract=1400163 or http://dx.doi.org/10.2139/ssrn.1400163

Varun Rai (Contact Author)

University of Texas at Austin - LBJ School of Public Affairs ( email )

2300 Red River St., Stop E2700
PO Box Y
Austin, TX 78713
United States

David G. Victor

UC San Diego, School of Global Policy and Strategy ( email )

9500 Gilman Drive
La Jolla, CA 92093-0519
United States

Mark C. Thurber

Stanford University - Program on Energy and Sustainable Development ( email )

Encina Hall
616 Serra St.
Stanford, CA 94305
United States

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