Power providers often defend those decisions by noting that the U.S. and most other countries with coal-intensive energy economies have not yet instituted policies for climate change mitigation that would make CCS cost-effective for uses not associated with enhanced oil recovery. Absent revenues from sales to oil field operators, applying CCS to new coal plants using current technology would be the least-cost path only if the cost of emitting CO2 were at least $25 to $30 per metric ton. Many current policy proposals for climate change mitigation in the U.S. envision significantly lower cost penalties to power providers for releasing CO2 (or similarly, payments for CO2 emissions-reduction credits).
Yet delaying CCS at coal power plants until economy-wide carbon dioxide control costs are greater than CCS costs is shortsighted. For several reasons, the coal and power industries and society would ultimately benefit if deployment of plants fitted with CCS equipment were begun now.
First, the fastest way to reduce CCS costs is via “learning by doing”—the accumulation of experience in building and running such plants. The faster the understanding is accumulated, the quicker the know-how with the new technology will grow, and the more rapidly the costs will drop.
Second, installing CCS equipment as soon as possible should save money in the long run. Most power stations currently under construction will still be operating decades from now, when it is likely that CCS efforts will be obligatory. Retrofitting generating facilities for CCS is inherently more expensive than deploying CCS in new plants. Moreover, in the absence of CO2 emission limits, familiar conventional coal steam-electric technologies will tend to be favored for most new plant construction over newer gasification technologies, for which CCS is more cost-effective.
Finally, rapid implementation would allow for continued use of fossil fuels in the near term (until more environmentally friendly sources become prevalent) without pushing atmospheric carbon dioxide beyond tolerable levels. Our studies indicate that it is feasible to stabilize atmospheric CO2 levels at 450 ppmv over the next half a century if coal-based energy is completely decarbonized and other measures described in the box at the left are implemented. This effort would involve decarbonizing 36 gigawatts of new coal generating capacity by 2020 (corresponding to 7 percent of the new coal capacity expected to be built worldwide during the decade beginning in 2011 under business-as-usual conditions). In the 35 years after 2020, CO2 capture would need to rise at an average rate of about 12 percent a year. Such a sustained pace is high compared with typical market growth rates for energy but is not unprecedented. It is much less than the expansion rate for nuclear generating capacity in its heyday—1956 to 1980—during which global capacity rose at an average rate of 40 percent annually. Further, the expansion rates for both wind and solar photovoltaic power capacities worldwide have hovered around 30 percent a year since the early 1990s. In all three cases, such growth would not have been practical without public policy measures to support them.
Our calculations indicate that the costs of CCS deployment would be manageable as well. Using conservative assumptions—such as that technology will not improve over time—we estimate that the present worth of the cost of capturing and storing all CO2 produced by coal-based electricity generation plants during the next 200 years will be $1.8 trillion (in 2002 dollars). That might seem like a high price tag, but it is equivalent to just 0.07 percent of the current value of gross world product over the same interval. Thus, it is plausible that a rapid decarbonization path for coal is both physically and economically feasible, although detailed regional analyses are needed to confirm this conclusion.