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future. However, if discount rates decline in the long term, then releases of CO2 from storage must be lower in order to achieve the same level of effectiveness.

Other authors suggest that the climate impact of CO2 released from imperfect storage will vary over time, so they expect carbon prices to depend on the method of accounting for the releases. Haugan and Joos (2004) found that there must be an upper limit to the rate of loss from storage in order to avoid temperatures and CO2 concentrations over the next millennium becoming higher in scenarios with geological CCS than in those without it18.

Dooley and Wise (2003) examined two hypothetical release scenarios using a relatively short 100-year simulation. They showed that relatively high rates of release from storage make it impossible to achieve stabilization at levels such as 450 ppmv. They imply that higher emissions trajectories are less sensitive to such releases but, as stabilization is not achieved until later under these circumstances, this result is inconclusive.

Pacala (2003) examined unintended releases using a simulation over several hundred years, assuming that storage security varies between the different reservoirs. Although this seemed to suggest that quite high release rates could be acceptable, the conclusion depends on extra CO2 being captured and stored, and thereby accumulating in the more secure reservoirs. This would imply that it is important for reservoirs with low rates of release to be available.

Such perspectives omit potentially important issues such as the political and economic risk that policies will not be implemented perfectly, as well as the resulting ecological risk due to the possibility of non-zero releases which may preclude the future stabilization of CO2 concentrations (Baer, 2003). Nevertheless, all methods imply that, if CO2 capture and storage is to be acceptable as a mitigation measure, there must be an upper limit to the amount of unintended releases.

The discussion above provides a framework for considering the effectiveness of the retention of CO2 in storage and suggests a potential context for considering the important policy question: 'How long is long enough?' Further discussion of these issues can be found in Chapters 8 and 9.

1.6.5 Time frame for the technology

Discussions of CCS mention various time scales. In this section, we propose some terminology as a basis for the later discussion.

Energy systems, such as power plant and electricity transmission networks, typically have operational lifetimes of

18 These authors calculated the effectiveness of a storage facility measured in terms of the global warming avoided compared with perfect storage. For a store which annually releases 0.001 of the amount stored, effectiveness is around 60% after 1000 years. This rate of release would be equivalent to a fraction retained of 90% over 100 years or 60% over 500 years. It is likely that, in practice, geological and mineral storage would have lower rates of release than this (see chapters 5 and 7) and hence higher effectiveness - for example, a release rate of 0.01% per year would be equivalent to a fraction retained of 99% over 100 years or 95% over 500 years.

30-40 years; when refurbishment or re-powering is taken into account, the generating station can be supplying electricity for even longer still. Such lifetimes generate expectations which are reflected in the design of the plant and in the rate of return on the investment. The capture equipment could be built and refurbished on a similar cycle, as could the CO2 transmission system. The operational lifetime of the CO2 storage reservoir will be determined by its capacity and the time frame over which it can retain CO2, which cannot be so easily generalized. However, it is likely that the phase of filling the reservoir will be at least as long as the operational lifetime of a power plant19. In terms of protecting the climate, we shall refer to this as the medium term, in contrast to the short-term nature of measures connected with decisions about operating and maintaining such facilities.

In contrast, the mitigation of climate change is determined by longer time scales: for example, the lifetime (or adjustment time) of CO2 in the atmosphere is often said to be about 100 years (IPCC, 2001c). Expectations about the mitigation of climate change typically assume that action will be needed during many decades or centuries (see, for example, IPCC, 2000a). This will be referred to as the long term. Even so, these descriptors are inadequate to describe the storage of CO2 as a mitigation measure. As discussed above, it is anticipated that CO2 levels in the atmosphere would rise, peak and decline over a period of several hundred years in virtually all scenarios; this is shown in Figure 1.7. If there is effective action to mitigate climate change, the peak would occur sooner

Very long term

Year

Figure 1.7 The response of atmospheric CO2 concentrations due to emissions to the atmosphere. Typical values for 'short term', 'medium term', 'long term' and' very long term' are years, decades, centuries, millennia, respectively. In this example, cumulative emissions are limited to a maximum value and concentrations stabilize at 550 ppmv (adapted from Kheshgi, 2003). This figure is indicative and should not be read as prescribing specific values for any of these periods. If the goal were to constrain concentrations in the atmosphere to lower levels, such as 450 ppmv, greater reductions in emission rates would be required.

Very long term

Year

Figure 1.7 The response of atmospheric CO2 concentrations due to emissions to the atmosphere. Typical values for 'short term', 'medium term', 'long term' and' very long term' are years, decades, centuries, millennia, respectively. In this example, cumulative emissions are limited to a maximum value and concentrations stabilize at 550 ppmv (adapted from Kheshgi, 2003). This figure is indicative and should not be read as prescribing specific values for any of these periods. If the goal were to constrain concentrations in the atmosphere to lower levels, such as 450 ppmv, greater reductions in emission rates would be required.

19 It should be noted that there will not necessarily be a one-to-one correspondence between a CO2-producing plant and storage reservoir. Given a suitable network for the transport of CO2, the captured CO2 from one plant could be stored in different locations during the lifetime of the producing plant.

(and be at a lower level) than if no action is taken. As suggested above, most of the CO2 must be stored for much longer than the time required to achieve stabilization. We consider this to be the very long term, in other words periods of time lasting centuries or millennia. Precisely how long is a subject of much debate at present and this will be explored in later chapters.

The successful development and implementation of CCS on a large scale might therefore be interpreted by society as a driver for reinforcing socio-economic and behavioural trends that are increasing total energy use, especially in developed countries and within high-income groups in developing countries21 (IPCC, 2001a).

1.6.6 Other effects of introducing CCS into scenarios

In view of the economic importance of energy carriers (more than 2 trillion dollars annually, World Energy Assessment, 2004) as well as fossil fuel's contribution to climate forcing (50 to 60% of the total), the decision to invest economic resources in the development of a technology such as CCS may have far-reaching consequences, including implications for equity and sustainable development (these are discussed in the following section). This emphasizes the importance of considering the wider ramifications of such investment.

The implementation of CCS would contribute to the preservation of much of the energy infrastructure established in the last century and may help restrain the cost of meeting the target for emissions reduction. From another perspective, its use may reduce the potential for application of alternative energy sources (Edmonds et al., 2001). As noted in section 1.3, the mitigation of climate change is a complex issue and it seems likely that any eventual solution will involve a portfolio of methods20. Even so, there is concern in some quarters that the CO2 capture and storage option could capture financial resources and the attention of policymakers that would otherwise be spent on alternative measures, although this issue has not been extensively analyzed in the literature.

The possibility of obtaining net negative emissions when coupling biomass energy and CCS may provide an opportunity to reduce CO2 concentration in the atmosphere if this option is available at a sufficiently large scale. In view of the uncertainty about the safe concentration of CO2 in the atmosphere, a large-scale option providing net negative emissions could be especially useful in the light of the precautionary principle.

1.6.6.1 Effect of CCS on energy supply and use All of the SRES scenarios (IPCC, 2000a) show significant consumption of fossil fuels for a long time into the future. One of the consequences of deploying CCS would be a continued use of fossil fuels in the energy mix but the minimization of their effect on the climate system and environment. By enabling countries to access a wider range of energy supplies than would otherwise be the case, energy security will be improved. Such aspects are important when considering climate change policy and sustainable development: as indicated before, decision-makers are likely to balance pure economic effectiveness against other socially relevant issues.

1.6.6.2 Effect of CCS on technological diversity

The fossil fuel energy system and its infrastructure can be thought of as a technology cluster. Such a phenomenon can be recognized as possibly presenting dangers as well as offering benefits for society. It can lead to specialization as innovations improve on dominant technologies, thereby generating further innovations which help to retain market share. On the other hand, innovations in technologies with small market shares are less valuable and so there is less incentive to improve on those technologies; a minor technology can therefore become trapped by high costs and a small market share. This phenomenon leads to path dependence or technology lock-in (Bulter and Hofkes, 2004; Unruh, 2000). Although CCS has not yet been examined specifically in this respect, it may be that reinforcing the position of the fossil fuel energy system may present barriers to increased technological diversity (a key element in evolutionary change; see Nelson and Winter, 1982).

It could be argued that increasing demand for some alternative energy sources will bring significant additional benefits outside the climate change arena such as rural sector jobs, or a large labour force for maintenance (World Energy Assessment, 2004). It is not possible to forecast the full societal impacts of such technology in its early days, especially as it seems likely that stabilizing atmospheric concentrations of CO2 will require the full slate of available technologies (including ones not yet developed). The available information is not adequate for predictions of the differences in job creation potential between different mitigation options.

In view of the paucity of literature on these aspects of CCS, this report cannot provide tools for a full quantitative judgment of options; it merely flags some of the other issues that decisionmakers will wish to consider. This is further discussed in Chapter 8.

1.6.6.3 Financing of the projects

Compared to a similar plant that releases CO2 to the atmosphere, a facility with capture and storage will cost more to build and to operate and will be less efficient in its use of primary energy. If regulations are adopted which cause the owners of CO2-emitting plant to limit emissions, and they choose to use CCS (or any other measure which increases their costs), they will need to find ways to recover the extra costs or accept a lower rate of return on their investment. In circumstances where emissions trading is allowed, companies may, in some cases, reduce the cost of meeting emission targets by buying or selling

20 The optimum portfolio of mitigation measures is likely to be different in different places and at different times. Given the variety of measures available, it seems likely that several will be used in a complementary fashion as part of the portfolio, and that there will not be a single clear 'winner' amongst them.

21 For example, housing units in many countries are increasing in size, and the intensity of electrical appliance use is increasing. The use of electrical office equipment in commercial buildings is also rising rapidly.

credits. Where the project is located in another Annex I country, it may be possible to fund this through Joint Implementation (JI). The Clean Development Mechanism (CDM) may provide opportunities for developing countries to acquire technology for emission reduction purposes, with some of the costs being borne by external funders who can claim credit for these investments. At the time of writing, it is uncertain whether CCS projects would be covered by the CDM and there are many issues to be considered. The current low value of Certified Emission Reductions is a major barrier to such projects at present (IEA GHG, 2004a). It is possible that some CO2-EOR projects could be more attractive, especially if the project would also delay the abandonment of a field or prevent job losses. The issue of the longevity of storage has still to be resolved but the longer retention time for geological formations may make it easier for CCS to be accepted than was the case for natural sinks. A number of countries have the potential to host CCS projects involving geological storage under CDM (IEA GHG, 2004a) but the true potential can only be assessed when the underground storage resources have been mapped. The above discussion shows that there are many questions to be answered about the financing of such options, not least if proposed as a project under the flexible mechanisms of the Kyoto Protocol.

1.6.7 Societal requirements

Even if CO2 capture and storage is cost-effective and can be recognized as potentially fulfilling a useful role in energy supply for a climate-constrained world, there will be other aspects that must be addressed before it can be widely used. For example, what are the legal issues that face this technology? What framework needs to be put in place for long-term regulation? Will CO2 capture and storage gain public acceptance?

1.6.7.1 Legal issues concerning CCS

Some legal questions about CCS can be identified and answered relatively easily; for example, the legal issues relating to the process of capturing CO2 seem likely to be similar to those facing any large chemical plant. Transporting CO2 through pipelines can probably be managed under current regulatory regimes for domestic and international pipelines. The extent to which the CO2 is contaminated with other substances, such as compounds of sulphur (see Chapter 4), might alter its classification to that of a hazardous substance, subjecting it to more restrictive regulation. However, the storage of carbon dioxide is likely to pose new legal challenges. What licensing procedure will be required by national authorities for storage in underground reservoirs onshore? It seems likely that factors to be considered will include containment criteria, geological stability, potential hazard, the possibility of interference with other underground or surface activities and agreement on sub-surface property rights, and controls on drilling or mining nearby.

Storage in geological formations below the sea floor will be controlled by different rules from storage under land. The Law of the Sea22, the London Convention and regional agreements such as the OSPAR Convention23 will affect storage of CO2 under the sea but the precise implications have yet to be worked out. This is discussed further in Chapter 5. Ocean storage raises a similar set of questions about the Law of the Sea and the London Convention but the different nature of the activity may generate different responses. These are discussed in Chapter 6.

A further class of legal issues concerns the responsibility for stored carbon dioxide. This is relevant because the CO2 will have been the subject of a contract for storage, or a contract for emissions reduction, and/or because of the possibility of unintended release. Should society expect private companies to be responsible over centuries for the storage of CO2?A judgement may have to be made about a reasonable balance between the costs and benefits to current and to future generations. In the case of the very long-term storage of nuclear waste, states have taken on the responsibility for managing storage; the companies that generate the waste, and make a profit from using the nuclear material, pay a fee to the government to take responsibility. In other fields, the deep-well injection of hazardous materials is sometimes the responsibility of governments and sometimes the responsibility of the companies concerned under a licensing system (IEA GHG, 2004b). Rules about insurance and about liability (if there were to be a release of CO2) will need to be developed so that, even if something happens in the distant future, when the company that stored it is no longer in business, there will be a means of ensuring another organization is capable and willing to accept responsibility.

The information on legal issues presented in this report reflects the best understanding at the time of writing but should not be taken as definitive as the issues have not been tested.

1.6.7.2 Public acceptance

Only a few studies have been carried out of public attitudes towards CCS. Such research presents challenges because the public is not familiar with the technology, and may only have a limited understanding of climate change and the possibilities for mitigation. As a result the studies completed to date have had to provide information on CCS (and on climate change) to their subjects. This tends to limit the scale of the study which can be carried out. This issue is examined in more detail in Chapter 5.

What form of public consultation will be needed before approval of a CCS project? Will the public compare CCS with other activities below ground such as the underground storage of natural gas or will CCS be compared to nuclear waste disposal? Will they have different concerns about different forms of storage, such as geological or ocean storage of CO2? Will the general attitude towards building pipelines affect the development of CO2 pipelines? These and other issues are the subject of current discussion and investigation.

When a CCS project is proposed, the public and governments will want to be satisfied that storage of carbon dioxide is so

22 The full text of these conventions is accessible on the Internet.

23 Issues of interest for this report are at the time of writing being discussed in the OSPAR convention that regulates the uses of the North East Atlantic.

secure that emissions will be reduced and also that there will be no significant threat to human health or to ecosystems (Hawkins, 2003). Carbon dioxide transport and storage will have to be monitored to ensure there is little or no release to the atmosphere but monitoring issues are still being debated. For example, can the anticipated low rates of CO2 release from geological storage be detected by currently available monitoring techniques? Who will do this monitoring (IEA GHG, 2004b)? How long should monitoring continue after injection: for periods of decades or centuries (IEA GHG, 2004c)?

1.7 Implications for technology transfer and sustainable development

1.7.1 Equity and sustainable development

The climate change issue involves complex interactions between climatic, environmental, economic, political, institutional, social, scientific, and technological processes. It cannot be addressed in isolation from broader societal goals, such as equity or sustainable development (IPCC, 2001a), or other existing or probable future sources of environmental, economic or social stress. In keeping with this complexity, a multiplicity of approaches has emerged to analyze climate change and related challenges. Many of these incorporate concerns about development, equity, and sustainability, albeit partially and gradually (IPCC, 2001a).

Sustainable development is too complex a subject for a simple summary; the study of this field aims to assess the benefits and trade-offs involved in the pursuit of the multiple goals of environmental conservation, social equity, economic growth, and eradication of poverty (IPCC, 2001a, Chapter 1). Most of the studies only make a first attempt to integrate a number of important sustainable development indicators and only a few have considered the implications for CCS (Turkenburg, 1997). To date, studies have focused on short-term side-effects of climate change mitigation policies (e.g., impact on local air and water quality) but they have also suggested a number of additional indicators to reflect development (e.g., job creation) and social impact (e.g., income distribution). CCS also poses issues relating to long-term liability for possible unintended releases or contamination which may have inter-generational and, in some cases, international consequences24. Further studies will be needed to develop suitable answers about CCS. In particular, long-term liability must be shown to be compatible with sustainable development.

There are various viewpoints relating to climate policy: one is based on cost-effectiveness, another on environmental sustainability, and another on equity (Munasinghe and Swart,

24 Some legislation is already in place which will influence this: for example both the London Convention (Article X) and its 1996 Protocol (Article 15) contain provisions stating that liability is in accordance with the principles of international law regarding a state's responsibility for damage caused to the environment of other states or to any other area of the environment. Similarly, regional agreements such as the OSPAR Convention incorporate the 'polluter pays' principle (Article 2(b)).

2005). Most policies designed to achieve the mitigation of climate change also have other important rationales. They can be related to the objectives of development, sustainability and equity. 'Conventional' climate policy analyses have tended to be driven (directly or indirectly) by the question: what is the cost-effective means of mitigating climate change for the global economy? Typically, these analyses start from a baseline projection of greenhouse gas emissions and reflect a specific set of socio-economic projections. Equity considerations are added to the process, to broaden the discussion from global welfare as a single subject to include the effects of climate change and mitigation policies on existing inequalities, amongst and within nations. The goal here goes beyond providing for basic survival, extending to a standard of living that provides security and dignity for all.

Ancillary effects of mitigation policies may include reductions in local and regional air pollution, as well as indirect effects on transportation, agriculture, land use practices, biodiversity preservation, employment, fuel security, etc. (Krupnick et al., 2000). The concept of 'co-benefits' can be used to capture dimensions of the response to mitigation policies from the equity and sustainability perspectives in a way that could modify the projections produced by those working from the cost-effectiveness perspective. As yet, little analysis has been reported of the option of CCS in these respects.

Will CO2 capture and storage favour the creation of job opportunities for particular countries? Will it favour technological and financial elitism or will it enhance equity by reducing the cost of energy? In terms of sustainable development, does the maintenance of the current market structures aid those countries that traditionally market fossil fuels, relative to those that import them? Is this something which mitigation policies should be developed to assist? There are no simple answers to these questions but policymakers may want to consider them. However, no analysis of these aspects of CCS is yet available. Furthermore, the mitigation options available will vary from country to country; in each case, policymakers have to balance such ancillary benefits with the direct benefits of the various options in order to select the most appropriate strategy.

1.7.2 Technology transfer

Article 4.5 of the UNFCCC requires all Annex I countries to take 'All practicable steps to promote, facilitate and finance, as appropriate, the transfer of, or access to, environmentally sound technologies and know-how to other parties, particularly developing countries, to enable them to implement provisions of the convention.' This applies to CCS as much as it does to any other mitigation option. This was precisely stated in the declaration issued at COP 7 (UNFCCC, 2001). Paragraph 8, item (d) states: 'Cooperating in the development, diffusion and transfer (...) and/or technologies relating to fossil fuels that capture and store GHGs, and encouraging their wider use, and facilitating the participation of the least developed countries and other Parties not included in Annex I in this effort'

In achieving these objectives of the Convention, several key elements will have to be considered (IPCC, 2001a). These are discussed in the IPCC Special Report on Technology Transfer (IPCC, 2000c), which looked into all aspects of the processes affecting the development, application and diffusion of technology. This looks at technology transfer for the purposes of adapting to climate change as well as for mitigation. It looks at processes within countries and between countries, covering hardware, knowledge and practices. Particularly important are the assessment of technology needs, the provision of technology information, capacity building, the creation of an enabling environment, and innovative financing to facilitate technology transfer.

Although no academic examination of CCS in these respects has yet been undertaken, some remarks can be made in general about this mitigation option.

1.7.2.1 Potential barriers

Technology transfer faces several barriers, including intellectual property rights, access to capital, etc.As with any new technology, CCS opens opportunities for proprietary rights. As it will rely on the development and/or integration of technologies, some of which are not yet used for such purposes, there is considerable scope for learning by doing. Several developing countries are already taking an active interest in this option, where they have national resources that would allow them to make use of this technique. For example, Deshun et al. (1998) have been looking at the related technique of CO2-EOR. Some of the key technologies will be developed by particular companies (as is occurring with wind power and solar photovoltaics) but will the intellectual property for CCS be accumulated in the hands of a few? CCS will involve both existing and future technologies, some of which will be proprietary. Will the owners of these rights to be willing to exploit their developments by licensing others to use them? At present it appears to be too early to answer these questions.

Given that the essential parts of CCS systems are based on established technology, it can be expected that it will be accessible to anyone who can afford it and wants to buy it. Several companies currently offer competing methods of capturing CO2; pipelines for CO2 and ships are constructed today by companies specializing in this type of equipment; the drilling of injection wells is standard practice in the oil and gas industry, and is carried out by many companies around the world. More specialist skills may be required to survey geological reservoirs; indeed, monitoring of CO2 underground is a very new application of seismic analysis. However, it is anticipated that, within a short space of time, these will become as widely available as other techniques derived from the international oil and gas industry. Making these technologies available to developing countries will pose similar challenges as those encountered with other modern technological developments. This shows the relevance of the UNFCCC declaration on technology transfer quoted above to ensure that developing countries have access to the option of CO2 capture and storage.

1.7.2.2 Potential users

CO2 emissions are rising rapidly in some developing countries; if these countries wish to reduce the rate of increase of emissions, they will want to have access to a range of mitigation options, one of which could be CCS. Initially it seems likely that CCS would be exploited by countries with relevant experience, such as oil and gas production25, but this may not be the case in other natural resource sectors. Will there be fewer opportunities for the transfer of CCS technology than for other mitigation options where technologies are in the hands of numerous companies? Or will the knowledge and experience already available in the energy sector in certain developing countries provide an opportunity for them to exploit CCS technologies? Will CO2 capture and storage technologies attract more interest from certain developing countries if applied to biomass sources26? If there is a year-round supply of CO2 from the biomass processing plant and good storage reservoirs within reasonable distance, this could be an important opportunity for technology transfer. As yet there are no answers to these questions.

1.8 Contents of this report

This report provides an assessment of CO2 capture and storage as an option for the mitigation of climate change. The report does not cover the use of natural sinks to sequester carbon since this issue is covered in the Land Use, Land Use Change and Forestry report (IPCC, 2000b) and in IPCC's Third Assessment Report (IPCC, 2001a).

There are many technical approaches which could be used for capturing CO2. They are examined in Chapter 3, with the exception of biological processes for fixation of CO2 from flue gases, which are not covered in this report. The main natural reservoirs which could, in principle, hold CO2 are geological formations and the deep ocean; they are discussed in Chapters 5 and 6 respectively. Other options for the storage and re-use of CO2 are examined in Chapter 7.

Chapter 2 considers the geographical correspondence of CO2 sources and potential storage reservoirs, a factor that will determine the cost-effectiveness of moving CO2 from the place where it is captured to the storage site. A separate chapter, Chapter 4, is dedicated to transporting CO2 from capture to storage sites.

The overall cost of this technology and the consequences of including it in energy systems models are described in Chapter 8. Some of the other requirements outlined above, such as legality, applicable standards, regulation and public acceptance, are discussed in detail at the appropriate point in several of the chapters. Governments might also wish to know how this method of emission reduction would be taken into account in national inventories of greenhouse gas emissions. This area is discussed in Chapter 9. Government and industry alike will be interested in the accessibility of the technology, in methods of financing the plant and in whether assistance will be available

25 In 1999, there were 20 developing countries that were each producing more than 1% of global oil production, 14 developing countries that were each producing more than 1% of global gas production, and 7 developing countries producing more than 1% of global coal production (BP, 2003).

26 For further discussion of using CCS with biomass, see Chapter 2.

from industry, government or supra-national bodies. At present, it is too early in the exploitation of this technology to make confident predictions about these matters. Three annexes provide information about the properties of CO2 and carbon-based fuels, a glossary of terms and the units used in this report. Gaps and areas for further work are discussed in the chapters and in the Technical Summary to this report.

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