The Limits of Liability in Promoting Safe Geologic Sequestration of CO2
David E. Adelman
University of Texas School of Law; University of Texas at Austin - Kay Bailey Hutchison Center for Energy, Law & Business
Ian J. Duncan
Bureau of Economic Geology, Jackson School of Geosciences, The University of Texas at Austin
March 16, 2011
Duke Environmental Law & Policy Forum, Vol. 22, No. 1, Fall 2011
Energy Center Research Paper Series No. 12-02
Deployment of new technologies is vital to climate change policy but invariably poses difficult tradeoffs. Carbon capture and storage (CCS), which involves the capture and permanent burial of CO2 emissions, exemplifies this truth. CCS lacks the green appeal of renewable sources of power, and disbelief is an all too common response of laypeople when told that billions of tons of CO2 can be stored underground for centuries. Yet its low (relative) cost and enormous capacity to mitigate CO2 emissions have attracted a broad range of prominent stakeholders, who assert that avoiding climate change will be impossible without CCS.
The legal debate over CCS mirrors these fault lines. The issues of greatest concern have centered on the risks of CO2 leakage and the merits of long-term liability. These fears reflect misapprehensions about the nature of the risks involved and a neglect of operational factors that simplify application of tort liability. Put in perspective, we show that the risks are remarkably small given the huge volumes of CO2 involved. We conclude that common law liability is likely to play a modest role in promoting safe geologic sequestration of CO2. The combination of risks with different temporal profiles will limit the deterrence value of liability, and long-term liability in particular will have only a nominal effect. The Article closes by proposing a hybrid legal framework that combines a traditional regulatory regime with a novel two-tiered system of liability that is calibrated to objective site characteristics.
Number of Pages in PDF File: 25
Keywords: Climate Change, Carbon Sequestration, Carbon Offsets, Liability Regimes
JEL Classification: K32, K13, K20
Date posted: March 21, 2011