Geological CO2 capture and storage (CCS) is among the main near-term contenders for addressing the problem of global climate change. Even in a baseline scenario, with no comprehensive international climate policy, a moderate level of CCS technology is expected to be deployed, given the economic benefits associated with enhanced oil and gas recovery. With stringent climate change control, CCS technologies will probably be installed on an industrial scale. Geologically stored CO2, however, may leak back to the atmosphere, which could render CCS ineffective as climate change reduction option. This article presents a long-term energy scenario study for Europe, in which we assess the significance for climate policy making of leakage of CO2 artificially stored in underground geological formations. A detailed sensitivity analysis is performed for the CO2 leakage rate with the bottom-up energy systems model MARKAL, enriched for this purpose with a large set of CO2 capture technologies (in the power sector, industry, and for the production of hydrogen) and storage options (among which enhanced oil and gas recovery, enhanced coal bed methane recovery, depleted fossil fuel fields, and aquifers). Through a series of model runs, we confirm that a leakage rate of 0.1%/year seems acceptable for CCS to constitute a meaningful climate change mitigation option, whereas one of 1%/year is not. CCS is essentially no option to achieve CO2 emission reductions when the leakage rate is as high as 1%/year, so more reductions need to be achieved through the use of renewables or nuclear power, or in sectors like industry and transport. We calculate that under strict climate control policy, the cumulative captured and geologically stored CO2 by 2100 in the electricity sector, when the leakage rate is 0.1%/year, amounts to about 45,000 MtCO2. Only a little over 10,000 MtCO2 cumulative power-generation-related emissions are captured and stored underground by the end of the century when the leakage rate is 1%/year. Overall marginal CO2 abatement costs increase from a few €/tCO2 today to well over 150 €/tCO2 in 2100, under an atmospheric CO2 concentration constraint of 550 ppmv. Carbon costs in 2100 turn out to be about 40 €/tCO2 higher when the annual leakage rate is 1%/year in comparison to when there is no CO2 leakage. Irrespective of whether CCS deployment is affected by gradual CO2 seepage, the annual welfare loss in Europe induced by the implementation of policies preventing “dangerous anthropogenic interference with the climate system” (under our assumption, implying a climate stabilisation target of 550 ppmv CO2 concentration) remains below 0.5% of GDP during the entire century.
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Among these are notably the lump sum unit investment costs, the fixed and variable operation and maintenance costs, the delivery costs per unit of commodity transferred to the relevant energy technology (and the amount of commodity required to generate one unit of energy per technology), mining costs, transportation and transaction costs, and the (exogenous) import and export prices of each commodity.
Consumer welfare loss is the reduction in surface between the demand curve and the equilibrium price level. Likewise, producer welfare loss is the reduction in surface between the supply curve and this equilibrium price.
These options are assumed to have potentials (in Europe) of 17, 30, 250 and 5 GtCO2, respectively, but it is recognised that these figures may significantly change with increasing natural scientific and economic knowledge of geological CO2 storage.
Under a climate constraint, biofuels appear to play an increasing role and prove to become responsible for the lion’s share of emission reductions in the transport sector (while hydrogen and electricity hardly do). Note that all plots of Fig. 1 represent power production for stationary use only, as MARKAL calculates that under our assumptions an electricity-based transport sector does not become cost-effective during the twenty-first century.
Figure 2 (left graph) shows an exception during the last decade of the century, for programmatic (cut-off) reasons.
We thereby provided justification for the EU strategy to promote damage cost internalisation with the purpose of limiting e.g. climate change.
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The authors acknowledge the EU-funded TranSust.Scan project (no. 022773 under Sixth Framework Programme priority FP6-2004-SSP-4) for having provided the means to undertake this analysis. Additional funding from the Dutch Ministry of Economic Affairs is also appreciated.
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van der Zwaan, B., Smekens, K. CO2 Capture and Storage with Leakage in an Energy-Climate Model. Environ Model Assess 14, 135–148 (2009). https://doi.org/10.1007/s10666-007-9125-3