Thursday, February 07, 2008

A Trust Fund Approach to Accelerating Deployment of CCS: Options and Considerations

The Pew Centre for Global Climate Change has just released it's latest report into the deployment of carbon caputure and storage technology. Carbon capture and storage (CCS) is a method for burning coal whilst prevnting the carbon from entering the atmosphere. That atleast is it's technical ability. It does have broader political implications; the coal industry which in the USA provides around half of all electricity, and in China provides around 80%, is a powerful constituency. In a democracy, so the theory goes, people have the power, but i reality concentrations of capital are a rival centre of power often in oposition to the people. CCS has the potential to placate this group, and turn coal production into part of the political solution not a source of fearce opposition. To those who believe that we should take on this fight, i respectuflly disagree and hope that we can do the most important thing in the power sector. Namely, preventing coal plants without carbon capture being built so that we can then focus on the many other problems. I explain the basics of the technology in earlier posts (link bellow) the take home message from the IPCC special report on CCS is that capacity isn't the issue. Saline aquifers, coal beds and depleted oil reserves have ample capacity to use this technology for more than 5o years. The key problems are efficiency loss (some of the coal energy is used to store the fumes), cost (at current levels of development this may be twice that of standard coal) and the related issue of rolling out the technology with sufficient rapidity to make an impact. The use of water for this technolgy may well also be a limiting factor locally.

"This paper discusses one possible avenue to accelerate deployment of carbon dioxide capture and sequestration (CCS) technologies: use of a special-purpose CCS Trust Fund. Trust funds can be an attractive policy option because, if properly designed, they can raise significant amounts of funds from non-governmental sources and can ensure that those paying into the fund benefit from the program. A CCS Trust Fund financed, for example, through fees on coal-based or fossil fuel-based electricity generation may have a role in reducing CO2 emissions from power plants because it could:

  • Raise funds at the scale needed to support a significant number—e.g., 10 to 30—of commercial-scale

  • CCS projects Ensure that the funds raised would be used to demonstrate CCS at commercial scale for a full range of systems applicable to U.S. power plants

  • Establish the true costs, reliability, and operability of power plants with CCS

  • Utilize private-sector business standards for project selection and management to ensure program cost- effectiveness.

  • Significantly reduce CCS costs within 10 to 15 years by supporting approximately 30 demonstrations, yielding substantial national economic benefits as CCS becomes widely deployed. "

Previous posts and reports from this blog on CCS.

Previous reports in the series.

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