Modeling the Future Costs of Carbon Capture using Experts’ Elicited Probabilities Under Policy Scenarios July 2013 Gregory Nemet, Erin Baker, and Karen Jenni

Gregory Nemet: modeling the costs of carbon capture 1.Multiple market failures  need govt 2.Multiple policy instruments available: Carbon prices Funding technology directly (R&D) Subsidies for early deployment 2 Premises for this work: What should governments do? Pre-commercial technologies are especially difficult to model

Gregory Nemet: modeling the costs of carbon capture 3 Question and approach How best to choose level and timing of R&D, subsidies, and C-prices to reduce costs?

Gregory Nemet: modeling the costs of carbon capture 3 Policy Scenarios 4 1. BAU 2.Cprice 3.Fed. R&D

Gregory Nemet: modeling the costs of carbon capture 7 Capture Technologies

Gregory Nemet: modeling the costs of carbon capture Step 1: Expert elicitation

Gregory Nemet: modeling the costs of carbon capture Step 2. Cost Model

Gregory Nemet: modeling the costs of carbon capture Results: Benchmarking to other studies

Gregory Nemet: modeling the costs of carbon capture Sensitivity analysis 9

Gregory Nemet: modeling the costs of carbon capture Propagate distributions on sensitivity parameters 10

Gregory Nemet: modeling the costs of carbon capture Select low-cost tech in each iteration

Gregory Nemet: modeling the costs of carbon capture Probability of reaching a target ($60/tCO 2 )

Gregory Nemet: modeling the costs of carbon capture Outcomes and Conclusions PDF of 2025 costs under policies Value to diversification Next: Technological change post-2025 Use integrated assessment model for effect of policy changes on: –emissions, concentrations, –abatement costs 13

Gregory Nemet: modeling the costs of carbon capture 3. Next steps: technological change post

Gregory Nemet: modeling the costs of carbon capture Preview of results from next steps 15