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 reaching decarbonization goals. Using nationwide CCUS data and property-level housing transaction records in the U.S., we quantify the impact of CCUS projects on nearby property values. Our research reveals three main findings. First, within 15 km of a CCUS project, property values decrease by 10.18% on average and the impact is heterogeneous depending on the property proximity. Second, a CCUS project’s negative impact varies across the project types and facility conditions. The value of a property decreases by 9.88% and 6.42% after a carbon capture-only and a carbon storage-only project is operational within 15 km of the property, respectively. Retrofit CCUS facilities have no significant impact on nearby housing prices, whereas new-built CCUS facilities significantly reduce nearby house prices by 10.68%. Third, we apply a DDD approach to distinguish between CCUS effects and oil basin effects on housing prices and find that the CCUS operation has a net impact of -17.84% on nearby housing prices when compared to similar houses in oil basins without CCUS operations. Our mechanism analysis indicates that the increase in house prices resulting from CCUS within 5 km may be attributed to the implementation of CCUS projects which capture carbon emissions and improve local air quality. Reduced house prices within 15 km of CCUS projects may be attributed to a decrease in both local economic development and air quality. We also explore the heterogeneous responses of CCUS operations based on environmental awareness, local economic activities, and the facility industry. Our paper provides important policy implications on the local economic impacts and the siting choices of CCUS projects. The study provides useful insights into how CCUS projects may be expanded efficiently.

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

JEL Classification: Q42, Q52, Q54, R21