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Investment and Market Development in Carbon Capture and Storage: Role of the Energy Charter Treaty

Published in 2009

Carbon Capture and Storage

Worldwide economic stability and development require energy but the vast majority of the world's current power production facilities emit carbon. Solving the challenge of climate change will require, therefore, not only breakthroughs in alternative sources of energy but also new technologies that allow continued use of fossil fuels in an environmentally friendly way. One option for large-scale CO2 mitigation is the use of carbon capture and storage (CCS).

Since the 1990s, advanced economies have put considerable resources toward research, development and deployment of CCS technologies around the world. Attention is currently shifting from the technical feasibility of this technology to launching large scale demonstration projects. At the same time, efforts are underway to address the market and regulatory challenges involved in CCS. This includes the issues of cost, the development of legal and regulatory frameworks, and promoting public acceptance of the new technology.

This report provides the first analysis of the applicability of the Energy Charter Treaty to the development of CCS. The report offers a broad overview of CCS. The available regulatory options for CCS as a potential tool for mitigating the effects of carbon dioxide emissions from fixed sources, particularly power generation plants, are evaluated. Key issues affecting the long-term deployment of CCS and the barriers and incentives that currently exist to this deployment are examined.