Nuclear versus Coal plus CCS: A Comparison of Two Competitive Base-load Climate Control Options

In this paper we analyze the relative importance and mutual behavior of two competing base-load electricity generation options that each are capable of contributing significantly to the abatement of global CO2 emissions: nuclear energy and coal-based power production complemented with CO2 capture and storage (CCS). We also investigate how, in scenarios from an integrated assessment model that simulates the economics of a climate-constrained world, the prospects for nuclear energy would change if exogenous limitations on the spread of nuclear technology were relaxed. Using the climate change economics model WITCH we find that until 2050 the resulting growth rates of nuclear electricity generation capacity become comparable to historical rates observed during the 1980s. Given that nuclear energy continues to face serious challenges and contention, we inspect how extensive the improvements of coal-based power equipped with CCS technology would need to be if our model is to significantly scale down the construction of new nuclear power plants.Economic Competition, Electricity Sector, Nuclear Power, Coal Power, CCS, Renewables, Climate Policy

Environmental Externalities of Geological Carbon Sequestration Effects on Energy Scenarios

Geological carbon sequestration seems one of the promising options to address, in the near term, the global problem of climate change, since carbon sequestration technologies are in principle available today and their costs are expected to be affordable. Whereas extensive technological and economic feasibility studies rightly point out the large potential of this ‘clean fossil fuel’ option, relatively little attention has been paid so far to the detrimental environmental externalities that the sequestering of CO2 underground could entail. This paper assesses what the relevance might be of including these external effects in long-term energy planning and scenario analyses. Our main conclusion is that, while these effects are generally likely to be relatively small, carbon sequestration externalities do matter and influence the nature of future world energy supply and consumption. More importantly, since geological carbon storage (depending on the method employed) may in some cases have substantial external impacts, in terms of both environmental damage and health risks, it is recommended that extensive studies are performed to quantify these effects. This article addresses three main questions: (i) What may energy supply look like if one accounts for large-scale CO2 sequestration in the construction of long-term energy and climate change scenarios; (ii) Suppose one hypothesizes a quantification of the external environmental costs of CO2 sequestration, how do then these supposed costs affect the evolution of the energy system during the 21st century; (iii) Does it matter for these scenarios whether carbon sequestration damage costs are charged directly to consumers or, instead, to electricity producers?Geological carbon storage, External costs, Energy scenarios

Climate Uncertainty and the Necessity to Transform Global Energy Supply

This paper analyses the policy relevance of the dominant uncertainties in our current scientific understanding of the terrestrial climate system, and provides further evidence for the need to radically transform - this century - our global infrastructure of energy supply, given the global average temperature increase as a result of anthropogenic carbon dioxide emissions. We investigate the effect on required CO2 emission reduction efforts, both in terms of how much and when, of our uncertain knowledge today of the climate sensitivity to a doubling in them atmospheric CO2 concentration. Also the roles of carbon-free energy and energy savings, and their evolutions over time, are researched, as well as their dependence on some of our characteristic modelling features. We use a top-down model in which there are two competing energy sources, fossil and non-fossil. Technological change is represented endogenously through learning curves, and modest but non-zero demand exists for the relatively expensive carbon-free energy resource.Global warming, CO2 emissions, Climate sensitivity, Fossil to non-fossil transition, Carbon-free power, Energy savings

The Economics of Geological CO2 Storage and Leakage

The economics of CO2 capture and storage in relation to the possibility of significant leakage of CO2 from geological reservoirs once this greenhouse gas has been stored artificially underground will be among the main determinants of whether CCS can significantly contribute to a deep cut in global CO2 emissions. This paper presents an analysis of the economic and climatic implications of the large-scale use of CCS for reaching a stringent climate change control target, when geological CO2 leakage is accounted for. The natural scientific uncertainties regarding the rates of possible leakage of CO2 from geological reservoirs are likely to remain large for a long time to come. We present a qualitative description, a concise analytical inspection, as well as a more detailed integrated assessment model, proffering insight into the economics of geological CO2 storage and leakage. Our model represents three main CO2 emission reduction options: energy savings, a carbon to non-carbon energy transition and the use of CCS. We find CCS to remain a valuable option even with CO2 leakage of a few %/yr, well above the maximum seepage rates that we think are likely from a geo-scientific point of view.Climate Change, Carbon Dioxide Emission Reduction, Technological Innovation, CO2 Capture and Storage (CCS), Geological Leakage

An Integrated Assessment of Climate Change, Air Pollution, and Energy Security Policy

This article presents an integrated assessment of climate change, air pollution, and energy security policy. Basis of our analysis is the MERGE model, designed to study the interaction between the global economy, energy use, and the impacts of climate change. For our purposes we expanded MERGE with expressions that quantify damages incurred to regional economies as a result of air pollution and lack of energy security. One of the main findings of our cost-benefit analysis is that energy security policy alone does not decrease the use of oil: global oil consumption is only delayed by several decades and oil reserves are still practically depleted before the end of the 21st century. If, on the other hand, energy security policy is integrated with optimal climate change and air pollution policy, the world’s oil reserves will not be depleted, at least not before our modeling horizon well into the 22nd century: total cumulative demand for oil then decreases by about 20%. More generally, we demonstrate that there are multiple other benefits of combining climate change, air pollution, and energy security policies and exploiting the possible synergies between them. These benefits can be large: for Europe the achievable CO2 emission abatement and oil consumption reduction levels are significantly deeper for integrated policy than when a strategy is adopted in which one of the three policies is omitted. Integrated optimal energy policy can reduce the number of premature deaths from air pollution by about 14,000 annually in Europe and over 3 million per year globally, by lowering the chronic exposure to ambient particulate matter. Only the optimal strategy combining the three types of energy policy can constrain the global average atmospheric temperature increase to a limit of 3ºC with respect to the pre-industrial level.Climate Change, Air Pollution, Energy Security, Cost-Benefit Analysis

Coal-based power generation with CCS versus nuclear energy: Two competitive base-load climate control options

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Offshore CCS and ocean acidification: a global long-term probabilistic cost-benefit analysis of climate change mitigation

Public fear for environmental and health impacts or potential leakage of CO2 from geological reservoirs is among the reasons why over the past decade CCS has not yet been deployed on a large enough scale so as to meaningfully contribute to mitigate climate change. Storage of CO2 under the seabed moves this climate mitigation option away from inhabited areas and could thereby take away some of the opposition towards this technology. Given that in the event of CO2 leakage for sub-seabed CCS the ocean would function as buffer for receiving this greenhouse gas, rather than the atmosphere, offshore CCS could particularly address concerns over the climatic impacts of CO2 seepage. In this paper we point out that recent geological studies confirm that leakage for individual offshore CCS operations may be highly unlikely from a technical point of view, if storage sites are well chosen, well managed and well monitored. But we argue that on a global long-term scale, for an ensemble of thousands or millions of storage sites, leakage of CO2 could take place in certain cases and/or countries for e.g. economic, institutional, legal or safety cultural reasons. We investigated what the impact could be in terms of temperature increase and ocean acidification if leakage would nevertheless occur, and addressed the question what the relative roles could be of on- and offshore CCS if mankind desires to divert the atmospheric damages resulting from climate change. For this purpose, we constructed a top-down energy-environment-economy model, with which we performed a probabilistic cost-benefit analysis of climate change mitigation with on- and offshore CCS as specific CO2 abatement options. One of our main conclusions is that even if there is non-zero leakage for CCS activity on a global scale, there is high probability that both onshore and offshore CCS could – on economic grounds – still account for anywhere between 20% and 80% of all future CO2 abatement efforts under a broad range of CCS cost assumptions

TECHNOLOGY DEVELOPMENT AND DIFFUSION AND INCENTIVES TO ABATE GREENHOUSE GAS EMISSIONS

More technology implies higher welfare. Therefore, it is individually rational to cooperate on technological development. It is not individually rational cooperate on greenhouse gas emission reduction. If technology cooperation only comes with cooperation on emission reduction, incentives to free ride on the emission reduction agreement are reduced. However, countries would prefer to cooperate on technology but not on emission reduction. If technology progresses through a learning-by-doing mechanism, more emission reduction technology does not necessarily imply higher emission reduction. However, for reasonable parameter choices, it does. This implies that technological cooperation is an effective instrument in emission reduction policy, also if that policy is of a non-cooperative nature. It also implies that it is in the best interest of technology leaders to subsidise the export of greenhouse gas reducing technology.Climate change, greenhouse gas emission reduction, endogenous technological change, learningby- doing, optimal emission control, coalition formation

Technology diffusion and the stability of climate coalitions

Free-riding is a major problem for international climate policy. A country can take advantage of other countries' emission reduction without contributing to abatement policies itself. Game theory suggests that issue linkage may help to overcome free-riding. Earlier studies suggest that if negotiations on greenhouse gas emission reduction are coupled to negotiation on technology transfer, the incentives to co-operate increase. This study confirms that finding. A country has less reason to free-ride if free-riding implies that the countries loses access to desirable, foreign technologies. We also show that, in many cases, it hurts to deny another country access to domestic technologies, if that country retaliates by withholding its technologies. We further show that the losses of withholding abatement technologies are small relative to the gains of free-riding. So, linking greenhouse gas emission reduction with technology diffusion helps to deter free-riding, but only a little bit, and only if the two issues are automatically linked