Monday, September 7, 2009

CCS in China

Anyone who imagines that deployment of carbon capture and sequestration can allow for Developing World growth and needed restriction on greenhouse gasses should pay close attention to a new report on China. In "The Real Drivers of Carbon Capture and Storage at Scale in China and Implications for Climate Policy", Richard K. Morse, Varun Rai, and Gang He. Morse et al. argue that, most importantly that: ".. the primary driver of current CCS projects in China is the strategic development of its energy security agenda, with particular emphasis on diversity of energy supply, reliable and cheap electricity, and the development of domestic intellectual property for energy technologies. Unfortunately, many analysts who are rushing to declare that CCS has arrived in China are confusing these motives for an enthusiastic embrace of CCS for purposes of large scale CO2 emissions reductions. A crucial distinction must then be made: while these energy security drivers are likely to foster the development China’s CCS demonstration efforts(as we are likely to witness in the near term), they do not translate into incentives to deploy CCS at scale. In fact, as we argue later, CCS at scale will place a heavy burden on China’s coal supply chain and is more likely to harm China’s energy security than to help it. The only manner in which CCS would concretely serve energy security needs would be if China were subject to a stringent greenhouse gas reduction regime at some future time, in which case CCS could facilitate the use of domestically-available coal (for either power or for transport using coal-toliquids technology). However, we argue that such a scenario is likely many years from being a reality, mainly because China has no core interest in agreeing to and enforcing such a regime on itself until it has developed economically to the point where a large domestic constituency values climate change action as much as rapid economic growth." For the full report, go to: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1463572

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