Investigating the Impacts of Carbon Pricing Mechanism on CCS development in ASEAN countries

Abstract

Abstract Carbon Capture and Storage (CCS) is a technology that contributes toward a reduction in carbon dioxide (CO2) emissions from large point sources. It has been proven to be a crucial technology to decarbonise ASEAN’s hard-to-abate industry sector. ASEAN countries are a concentrated cluster, contributing to significant emissions, and provides the potential for suitable geological storage for CCS according to current studies. This paper discusses the impact of carbon pricing on the CCS development in ASEAN countries, through studying factors that enable or disable successful CCS projects. Causal Loop Diagram (CLD), as a part of system dynamics, was employed as an analytical tool to identify and visualize the key variables, system’s structure, the network of existing carbon pricing mechanisms and other financing instruments needed in CCS deployment. The results of this study indicate that strong public and private finance, the development of carbon markets, and carbon pricing policies are the key enablers for CCS projects in ASEAN. Carbon pricing should be viewed as an effective catalyst that helps the growth of CCS with the right policies in place, government and regulatory support, and market forces.