Modeling the Diffusion of Carbon Capture and Storage Under Carbon Emission Control and Learning Effects

20 Pages Posted: 25 Sep 2009 Last revised: 25 Jul 2019

See all articles by Jan Abrell

Jan Abrell

ETH Zürich - Centre for Energy Policy and Economics (CEPE)

Johannes Herold

affiliation not provided to SSRN

Florian Leuthold

Dresden University of Technology - Faculty of Economics and Business Management

Multiple version iconThere are 2 versions of this paper

Date Written: September 24, 2009

Abstract

This paper examines the interrelationship of learning e ffects and emission control on the diffusion of carbon capture and storage (CCS). We introduce a dynamic model in which an electricity producer maximizes pro ts subject to emissions control. All technologies are characterized by specific linear marginal costs and CO2 emissions which need to be covered by limited emission permits. The fossil fuel-based plants can be replaced by the CCS technology which is associated with higher capital costs and a lower system efficiency. Both parameters improve due to learning effects if the technology is applied. The model is formulated as a non-linear optimization problem, and solved using GAMS. Given the assumed technological data, the results for a data set of Germany show that CCS is essential to reach carbon emission goals. However, particularly in the case of learning, CCS can help renewable technologies to become competitive.

Keywords: Carbon capture and storage, CCS, Climate policy, Learning

JEL Classification: H23, O30, Q40

Suggested Citation

Abrell, Jan and Herold, Johannes and Leuthold, Florian U., Modeling the Diffusion of Carbon Capture and Storage Under Carbon Emission Control and Learning Effects (September 24, 2009). Available at SSRN: https://ssrn.com/abstract=1478384 or http://dx.doi.org/10.2139/ssrn.1478384

Jan Abrell (Contact Author)

ETH Zürich - Centre for Energy Policy and Economics (CEPE) ( email )

8092 Zurich
Switzerland

Johannes Herold

affiliation not provided to SSRN ( email )

Florian U. Leuthold

Dresden University of Technology - Faculty of Economics and Business Management ( email )

Mommsenstrasse 13
Dresden, D-01062
Germany

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