The moderating effect of emission reduction policies on CCS mitigation efficiency

Abstract

Carbon capture and storage (CCS) is a critical decarbonization technology for achieving net-zero emissions. High energy costs currently hinder the application of CCS, whereas carbon emission reduction measures directly alter the energy price and influence the cost and emission reduction potential of CCS. However, few studies have focused on the potential impacts and underlying mechanisms of emission reduction policies on CCS. In this study, we construct a computable general equilibrium model with CCS technology to assess the moderating effect of mitigation policies on CCS, and identify feasible policy portfolios to enhance CCS mitigation efficiency. Taking China as a typical case, the results show that, first, energy efficiency improvement and renewable energy policy contribute to mitigating the negative economic impacts of CCS abatement, and terminal electrification policy can enhance the emission reduction of CCS, whereas none of the three measures can achieve a win-win situation in terms of economic and emission impacts. Second, the moderating effect of mitigation policies on CCS exhibits heterogeneity among CCS deploying industries. Promoting terminal electrification is optimal for the coal power industry to improve CCS mitigation efficiency, while renewable energy development has a larger positive effect on the steel, cement, and chemical industries. Third, the combination of a high-intensity renewable energy policy with low-intensity energy efficiency improvements and terminal electrification policy is optimal for overall mitigation efficiency.