Publication

The paper provides a perspective on future cost-benefit discussions of carbon dioxide capture and storage (CCS) by highlighting the optimality of CCS use viewed as a non-renewable resource with a limited capacity. By using a simple analytical dynamic optimization model, the author examines the optimal paths of CCS use, CCS' real price inclusive of the shadow price, and the difference from the operational price. A particular implication of the model is that if all else is equal, the shadow price of CCS could make the technology relatively less attractive than renewable energy due to CCS' reliance on scarce reservoirs and the resultant shadow value.