Environmental Modeling & Assessment

, Volume 18, Issue 4, pp 417–426 | Cite as

Optimal Carbon Capture and Storage Policies

  • Alain Ayong Le Kama
  • Mouez Fodha
  • Gilles Lafforgue


The IPCC recommends the use of carbon capture and sequestration (CCS) technologies in order to achieve the Kyoto environmental goals. This paper sheds light on this issue by assessing the optimal strategy regarding the long-term use of CCS technologies. The aim is to analyze the optimal CCS policy when the sequestration rate is endogenous, being therefore one specific tool of the environmental policy. We develop a simple growth model to identify the main driving forces that should determine the optimal CCS policy. We show that, under some conditions on the cost of extractions, CCS may be a long-term solution to curb carbon emissions. We also show that over time the social planner will choose to decrease the rate of capture and sequestration. We then derive the decentralized equilibrium outcome by considering the programs of the fossil resource-holder and of the representative consumer. Finally, we determine the optimal environmental policy, i.e. the carbon tax scheme, as well as the dynamics of the fossil fuel price needed to implement it.


Carbon capture and sequestration Optimal growth Environmental policy 



The authors are indebted to two anonymous referees for their helpful suggestions and comments on an earlier version of this article.


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Copyright information

© Springer Science+Business Media Dordrecht 2013

Authors and Affiliations

  • Alain Ayong Le Kama
    • 1
  • Mouez Fodha
    • 2
    • 3
  • Gilles Lafforgue
    • 4
  1. 1.EconomiXUniversity of Paris Ouest NanterreNanterreFrance
  2. 2.LEOUniversity of OrleansOrléansFrance
  3. 3.Paris School of EconomicsParisFrance
  4. 4.Toulouse Business SchoolUniversity of ToulouseToulouseFrance

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