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Building infrastructures for Fossil- and Bio-energy with Carbon Capture and Storage: insights from a cooperative game-theoretic perspective

Jagu, E. and Massol, O. (2020). Building infrastructures for Fossil- and Bio-energy with Carbon Capture and Storage: insights from a cooperative game-theoretic perspective (20/15). London, UK: Department of Economics, City, University of London.

Abstract

This paper examines the deployment of a shared CO2 transportation infrastructure needed to support the combined emergence of Bio-energy with Carbon Capture and Storage (BECCS) and Fossil energy with Carbon Capture and Storage (CCS). We develop a cooperative game-theoretic approach to: (i) examine the conditions needed for its construction to be decided, and (ii) determine the break-even CO2 value needed to build such a shared infrastructure. In particular, we highlight that, as biogenic emissions are overlooked in currently-implemented carbon accounting frameworks, BECCS and CCS emitters face asymmetric conditions for joining a shared infrastructure. We thus further examine the influence of these carbon accounting considerations by assessing and comparing the break-even CO2 values obtained under alternative accounting rules. We apply this modeling framework to a large contemporary BECCS/CCS case-study in Sweden. Our results indicate that sustainable and incentive-compatible cooperation schemes can be implemented if the value of CO2 is high enough and show how that value varies depending on the carbon accounting framework retained for negative emissions and the nature of the infrastructure operators. In the most advantageous scenario, the CO2 value needs to reach 112€/tCO2, while the current Swedish carbon tax amounts to 110€/tCO2. Overall, these findings position pragmatic policy recommendations for local BECCS deployment.

Publication Type: Monograph (Discussion Paper)
Additional Information: Copyright 2020, The Authors.
Publisher Keywords: Bio-energy with Carbon Capture and Storage, Negative emissions, CO2 transportation, infrastructure, cooperative game theory, carbon accounting
Subjects: G Geography. Anthropology. Recreation > GE Environmental Sciences
H Social Sciences > HB Economic Theory
T Technology > TD Environmental technology. Sanitary engineering
Departments: School of Arts & Social Sciences > Economics > Discussion Paper Series
Date Deposited: 06 Oct 2020 13:20
URI: https://openaccess.city.ac.uk/id/eprint/25034
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