Skip to main content

Advertisement

Log in

Carbon capture and storage: combining economic analysis with expert elicitations to inform climate policy

  • Published:
Climatic Change Aims and scope Submit manuscript

Abstract

The relationship between R&D investments and technical change is inherently uncertain. In this paper we combine economics and decision analysis to incorporate the uncertainty of technical change into climate change policy analysis. We present the results of an expert elicitation on the prospects for technical change in carbon capture and storage. We find a significant amount of disagreement between experts, even over the most mature technology; and this disagreement is most pronounced in regards to cost estimates. We then use the results of the expert elicitations as inputs to the MiniCAM integrated assessment model, to derive probabilistic information about the impacts of R&D investments on the costs of emissions abatement. We conclude that we need to gather more information about the technical and societal potential for Carbon Storage; cost differences among the different capture technologies play a relatively smaller role.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Baker E, Adu-Bonnah K (2008) Investment in risky R&D programs in the face of climate uncertainty. Energy Econ 30:465–486

    Article  Google Scholar 

  • Baker E, Chon H, Keisler J (2008a) NuclearPower: combining expert elicitations with economic analysis to inform climate policy. Available at SSRN: http://ssrn.com/abstract=1407048

  • Baker E, Chon H, Keisler J (2009) Advanced solar R&D: combining economic analysis with expert elicitations to inform climate policy. Energy Econ 31:S37–S49

    Article  Google Scholar 

  • Baker E, Clarke L, Keisler J, Shittu E (2007) Uncertainty, technical change, and policy models. Technical Report 1028, College of Management, University of Massachusetts, Boston

  • Baker E, Clarke L, Shittu E (2008b) Technical change and the marginal cost of abatement. Energy Econ 30:2799–2816

    Article  Google Scholar 

  • Baker E, Clarke L, Weyant J (2006) Optimal technology R&D in the face of climate uncertainty. Clim Change 78:157–179

    Article  Google Scholar 

  • Blanford GJ (2006) Technology strategy for climate change: optimal R&D investment and its interaction with abatement policy. Ph.D. thesis, Stanford University

  • Bohringer C, Rutherford TF (2006) Innovation, uncertainty and instrument choice for climate policy. Working paper. http://rockefeller.dartmouth.edu/assets/pdf/Rutherford.pdf

  • Bramoulle Y, Olson LJ (2005) Allocation of pollution abatement under learning by doing. J Public Econ 89:1935–1960

    Article  Google Scholar 

  • Brenkert AS, Smith S, Kim S, Pitcher H (2003) Model documentation for the MiniCAM. Technical report PNNL-14337, Pacific Northwest National Laboratory

  • Clarke JF, Edmonds JA (1993) Modeling energy technologies in a competitive market. Energy Econ J 15:123–129

    Article  Google Scholar 

  • Clarke L, Edmonds J, Jacoby H, Pitcher H, Reilly J, Richels R (2007a) Scenarios of greenhouse gas emissions and atmospheric concentrations. Final report, U.S. Climate Change Science Program. http://www.climatescience.gov/Library/sap/sap2-1/finalreport/sap2-1a-final-all.pdf

  • Clarke L, Wise M, Kim S, Smith S, Lurz J, Edmonds J, Pitcher H (2007b) Model documentation for the minicam climate change science program stabilization scenarios: Ccsp product 2.1a. Technical report, Pacific Northwest National Laboratory

  • Clarke L, Wise M, Placet M, Izaurralde RC, Lurz J, Kim S, Smith S, Thomson A (2006) Climate change mitigation: an analysis of advanced technology scenarios. Technical report PNNL-16078, Pacific Northwest National Laboratory

  • Clemen RT, Winkler RL (1999) Combining probability distributions from experts in risk analysis. Risk Anal 19:187–203

    Google Scholar 

  • David J, Herzog H (2000) The cost of carbon capture. Presented at the fifth international conference on greenhouse gas control technologies, Cairns, Australia, 13–16 August

  • DOE (2007) Carbon sequestration technology roadmap and program plan. United States Department of Energy, Washington D.C.

    Google Scholar 

  • Dooley JJ, Dahowski RT, Davidson CL, Wise MA, Gupta N, Kim SH (2006) Carbon dioxide capture and geologic storage: a core element of a global energy technology strategy to address climate change. PNNL, Richland, WA

  • Downing PB, White LJ (1986) Innovation in pollution control. J Environ Econ Manage 13:18–29

    Article  Google Scholar 

  • Edmonds JA, Clarke JF, Dooley JJ, Kim SH, Smith SJ (2005) Stabilization of CO2 in a B2 world: insights on the roles of carbon capture and storage, hydrogen, and transportation technologies. In: Weyant J, Tol R (eds) Special issue, energy economics

  • Fischer C, Parry IWH, Pizer WA (2003) Instrument choice for environmental protection when technological innovation is endogenous. J Environ Econ Manage 45:523–545

    Article  Google Scholar 

  • Goulder L, Mathai K (2000) Optimal CO2 abatement in the presence of induced technological change. J Environ Econ Manage 39:1–38

    Article  Google Scholar 

  • Goulder L, Schneider S (1999) Induced technological change and the attractiveness of CO2 abatement policies. Resour Energy Econ 21:211–253

    Article  Google Scholar 

  • Hotelling H (1931) The economics of exhaustible resources. J Polit Econ 39:137–175

    Article  Google Scholar 

  • Howard RA, Matheson JE (2005) Influence diagram retrospective. Decision Anal 2:144–147

    Google Scholar 

  • Esber III GS (2006) Carbon dioxide capture technology for the coal-powered electricity industry: a systematic prioritization of research needs. MIT, Cambridge

    Google Scholar 

  • IPCC (2005) Special report on carbon dioxide capture and storage. Cambridge University Press, New York, NY

    Google Scholar 

  • Jensen MD, Musich MA, Rubya JD, Steadman EN, Harju JA (2005) Carbon seperation and capture. Technical report, Energy and Environmental Research Center, National Energy Technology Laboratory

  • Jung C, Krutilla K, Boyd R (1996) Incentives for advanced pollution abatement technology at the industry level: an evaluation of policy alternatives. J Environ Econ Manage 30:95–111

    Article  Google Scholar 

  • Katzer J, Moniz EJ, Deutch J, Ansolabehere S, Beer J et al (2007) The future of coal: an interdisciplinary MIT study. Technical report, Massachusetts Institute of Technology

  • Keith DW (1996) When is it appropriate to combine expert judgments? Clim Change 33:139–143

    Article  Google Scholar 

  • Metz B, Davidson O, de Coninck HC, Loos M, Meyer LA (eds) (2005) IPCC special report on carbon dioxide capture and storage. Cambridge University Press, Cambridge

    Google Scholar 

  • Milliman SR, Prince R (1989) Firm incentives to promote technological change in pollution control. J Environ Econ Manage 17:247–265

    Article  Google Scholar 

  • Montero J-P (2002) Permits, standard, and technology innovation. J Environ Econ Manage 44:23–44

    Article  Google Scholar 

  • Morgan MG, Keith DW (1995) Subjective judgments by climate experts. Environ Sci Technol 29:468–476

    Article  Google Scholar 

  • National Research Council (2007) Prospective evaluation of applied energy research and development at DOE (Phase two). The National Academies Press, Washington D.C. http://www.nap.edu/catalog/11806.html

    Google Scholar 

  • Nemet GF, Baker E (2009) Demand subsidies versus R&D: comparing the uncertain impacts of policy on a pre-commercial low-carbon energy technology. Energy Journal, forthcoming

  • Parry I (1998) Pollution regulation and the efficiency gains from technological innovation. J Regul Econ 14:229–254

    Article  Google Scholar 

  • Peck SC, Wan YH (1996) Analytic solutions of simple greenhouse gas emission models. In: Van Ierland EC, Gorka K (eds) Economics of atmospheric pollution, chapter 6. Springer, Berlin

    Google Scholar 

  • Riahi K, Rubin ES, Taylor MR, Schrattenholzer L, Hounshell D (2004) Technological learning for carbon capture and sequestration technologies. Energy Econ 26:539–564

    Article  Google Scholar 

  • Rosendahl KE (2004) Cost-effective environmental policy: implications of induced technological change. J Environ Econ Manage 48:1099–1121

    Article  Google Scholar 

  • Rubin ES, Taylor MR, Yeh S, Hounshell DA (2004) Learning curves for environmental technology and their importance for climate policy analysis. Energy 29:1551–1559

    Article  Google Scholar 

  • Salo AA, Bunn DW (1995) Decomposition in the assessment of judgmental probability forecasts. Technol Forecast Soc Change 49:13–25

    Article  Google Scholar 

  • Spetzler CS, Stael von Holstein C-AS (1975) Probability encoding in decision analysis. Manage Sci 22:340–358

    Article  Google Scholar 

  • von Winterfeldt D, Edwards W (1986) Decision analysis and behavioral research. Cambridge Universtiy Press, Cambridge

    Google Scholar 

  • Weyant JP, Hill J (1999) Introduction and overview. The costs of the Kyoto protocol: a multi-model evaluation. Special Issue of The Energy Journal, pp vii–xliv

  • Winkler RL, Clemen RT (2004) Multiple experts vs. multiple methods: combining correlation assessments. Decision Anal 1:167–176

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Erin Baker.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Baker, E., Chon, H. & Keisler, J. Carbon capture and storage: combining economic analysis with expert elicitations to inform climate policy. Climatic Change 96, 379–408 (2009). https://doi.org/10.1007/s10584-009-9634-y

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10584-009-9634-y

Keywords

Navigation