There are truths that cannot be denied. First, nature will determine how serious a problem climate change is, not our politicians. Second, it is always cheaper to vent CO2 into the atmosphere than to capture and store it. Therefore, it is unreasonable to expect CCS to be deployed on a large-scale without strong climate policy to drive it.
The most important thing one can do to accelerate the development and adoption of CCS technology is to create commercial markets. While some markets exist for the utilisation of CO2, most notably CO2 for enhanced oil recovery (EOR), they have their limitations. Specifically, the cost for capturing CO2 from power plants is between two and four times the cost that EOR operators are willing to pay. Therefore, in the longer-term, there is no substitute for climate policy that puts a high enough price on carbon to create robust markets for CCS. Since the implementation of climate policy is moving at a very slow pace, these climate markets may need a couple of decades to become reality. The key question then becomes what should we be doing now to develop CCS so it can be ready when called upon.
The two key overarching goals for a global CCS research and development strategy are (1) proving the viability of large-scale storage and (2) lowering the cost of capture. Without demonstrating the safety of long-term, large-scale storage, the public is unlikely to ever accept using subsurface formations to store large amounts of CO2. Without lower costs, CCS will not be able to unlock its true potential as a mitigation technology.
To adequately address these goals, the world will need to invest tens of billions of dollars over the next decade. However, traditional funding from government and industrial investment, revenues from selling carbon permits are proving inadequate. New, reliable sources of funding are required. One possibility is a small surcharge (less than $0.001/kWh) on all fossil generated electricity.
We also need to rethink our development strategy. We need to concentrate on fewer projects rather than spreading the funding out too thin (in many cases for political reasons). We will need to trade quantity for quality, ensuring that a limited number of demonstration projects produce maximum return.
In summary, CCS is critical for a secure, clean energy future. It is the only technology that can allow the continued use of our large fossil energy resources while drastically reducing their greenhouse gas emissions. However, progress to date has been much slower than desired, not because of the limitations of the technology, but because of lack of funding to develop and deploy them. Whether our expectations for CCS will be met in the future depends on our commitment to invest in it now.
This post is part of a series for the Global Energy Conversation, supported by Shell. For more information, visit the Global Energy Conversation website
Jan Eide and Sadia Raveendran also contributed to this article
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.
