Robust mitigation options will play significant role in achieving the target of limiting global change to below 1.5 °C above pre-industrial levels by 2100. To support cooperation for mitigation development, we establish a real options-based model to evaluate the rational decisions of exercising the abandon option for carbon capture and storage-enhanced oil recovery (CCS-EOR) projects under oil market and geological uncertainties. Three possible cooperative mechanisms (fixed carbon dioxide (CO2) price, oil-indexed CO2 price, and joint venture contracts) among CO2-EOR stakeholders are evaluated. The results show that the conflicts in profit maximization targets for different stakeholders in cooperative mitigation are to a great extent unable to be avoided. A joint venture business model is preferred in cooperative mitigation as it can effectively weaken such conflicts. And it is more reasonable to provide incentives to the downstream of the CO2-EOR chain than compensating the adoption cost of carbon capture technologies in the upstream. From a global perspective, the inefficient cooperation can be a main barrier that hinders the development of deep-cutting options. Global mitigation strategies should not only focus on promoting technology progress but also the design of innovative business models to balance the benefits among stakeholders. A joint venture business model is recommended in both the developed and developing countries for seizing the early mitigation opportunities.
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Climate change Research Articles published between Aug 08, 2022 to Aug 14, 2022
Aug 15, 2022
Articles Included: 5
Introduction: There is no consensus on the policies that should be seen as implicitly pricing carbon (see World Bank (2019a) for a discussion). The OE...Read More
Gender Equality Research Articles published between Aug 08, 2022 to Aug 14, 2022
Aug 15, 2022
Articles Included: 4
I would like to thank Anna Khakee, Federica Zardo and Ragnar Weilandt for their very useful comments as well as the participants of the workshop of 21...Read More
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