Research Team: Michael R. Hamilton, Richard K. Lester and Howard J. Herzog
Sponsors: Carbon Sequestration Initiative, The Doris Duke Foundation
Summary:
The past twenty years of R&D in CCS technology has yielded several commercially-ready CCS solutions, albeit at a 60-80% higher electricity cost than new traditional coal electricity generation. While a carbon dioxide cap-and-trade or tax mechanism will be necessary to deploy CCS commercially, this carbon price alone is unlikely to decrease the technology cost and business risk enough to see high market penetration of CCS technology in the next few decades. Effective public and private institutions must exist to support CCS R&D as well as commercial-scale demonstration. These institutions must both oversee a continued push for R&D in search of lower-cost, innovative forms of CCS, and ensure completion of several commercial-scale demonstration projects to reduce technology risk and gain construction and operation experience over the next decade. Following an effective CCS demonstration phase, several policy mechanisms will likely be needed to reduce business risk and incentivize private investment for first movers. As the technology matures and costs go down, the final commercial deployment phase will require less government involvement as a stable carbon price begins to support a permanent market for CCS technology.
This project will approach each stage of CCS technology innovation by analyzing current institutional framework and developing a quantitative model of the CCS innovation process. Conclusions from both approaches will be combined to yield a comprehensive set of policy and industry recommendations to accelerate the commercial deployment of CCS technology.
Publications:
Hamilton, M., " An Analytical Framework for Long Term Policy for Commercial Deployment and Innovation in Carbon Capture and Sequestration Technology in the United States," M.I.T. Masters Thesis, December (2009). <PDF>
Hamilton, M., H. Herzog and J. Parsons, "Cost and U.S. Public Policy for New Coal Power Plants with Carbon Capture and Sequestration," presented at the 9th International Conference on Greenhouse Gas Control Technologies, Washington, DC, November (2008). <PDF>
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Research