The economics of bioenergy with carbon capture and storage (BECCS) deployment in a 1.5°C or 2°C world

Joint Program Report
The economics of bioenergy with carbon capture and storage (BECCS) deployment in a 1.5°C or 2°C world
Fajardy, M., J. Morris, A. Gurgel, H. Herzog, N. MacDowell, S. Paltsev (2020)
Joint Program Report Series

Report 345 [Download]

Abstract/Summary:

Abstract: Bioenergy with carbon capture and storage (BECCS) and afforestation are key negative emission technologies suggested in many studies under 2°C or 1.5°C scenarios. However, these large-scale land-based approaches have raised concerns about their economic impacts, particularly their impact on food prices, as well as their environmental impacts. Here we focus on quantifying the potential scale of BECCS and its impact on the economy, taking into account technology and economic considerations, but excluding sustainability and political aspects.

To do so, we represent all major components of BECCS technology in the MIT Economic Projection and Policy Analysis model. We find that BECCS could make a substantial contribution to emissions reductions in the second half of the century under 1.5 and 2°C climate stabilization goals, with its deployment driven by revenues from carbon dioxide permits. Results show that global economic costs and the carbon prices needed to hit the stabilization targets are substantially lower with the technology available, and BECCS acts as a true backstop technology at carbon prices around $240 per ton of carbon dioxide. If driven by economics alone, BECCS deployment increases the use of productive land for bioenergy production, causing substantial land use changes. However, the projected impact on commodity prices is limited, with global commodity price indices increasing by less than 5% on average, and up to 15% in selected regions.

While BECCS deployment is likely to be constrained for environmental and/or political reasons, this study shows that the large-scale deployment of BECCS is not detrimental to agricultural commodity prices and could reduce the costs of meeting stabilization targets. Still, it is crucial that policies consider carbon dioxide removal as a complement to drastic carbon dioxide emissions reductions, while establishing a credible accounting system and sustainable limits on BECCS.

Citation:

Fajardy, M., J. Morris, A. Gurgel, H. Herzog, N. MacDowell, S. Paltsev (2020): The economics of bioenergy with carbon capture and storage (BECCS) deployment in a 1.5°C or 2°C world. Joint Program Report Series Report 345. (http://globalchange.mit.edu/publication/17489)
  • Joint Program Report
The economics of bioenergy with carbon capture and storage (BECCS) deployment in a 1.5°C or 2°C world

Fajardy, M., J. Morris, A. Gurgel, H. Herzog, N. MacDowell, S. Paltsev

Report 

345
2020

Abstract/Summary: 

Abstract: Bioenergy with carbon capture and storage (BECCS) and afforestation are key negative emission technologies suggested in many studies under 2°C or 1.5°C scenarios. However, these large-scale land-based approaches have raised concerns about their economic impacts, particularly their impact on food prices, as well as their environmental impacts. Here we focus on quantifying the potential scale of BECCS and its impact on the economy, taking into account technology and economic considerations, but excluding sustainability and political aspects.

To do so, we represent all major components of BECCS technology in the MIT Economic Projection and Policy Analysis model. We find that BECCS could make a substantial contribution to emissions reductions in the second half of the century under 1.5 and 2°C climate stabilization goals, with its deployment driven by revenues from carbon dioxide permits. Results show that global economic costs and the carbon prices needed to hit the stabilization targets are substantially lower with the technology available, and BECCS acts as a true backstop technology at carbon prices around $240 per ton of carbon dioxide. If driven by economics alone, BECCS deployment increases the use of productive land for bioenergy production, causing substantial land use changes. However, the projected impact on commodity prices is limited, with global commodity price indices increasing by less than 5% on average, and up to 15% in selected regions.

While BECCS deployment is likely to be constrained for environmental and/or political reasons, this study shows that the large-scale deployment of BECCS is not detrimental to agricultural commodity prices and could reduce the costs of meeting stabilization targets. Still, it is crucial that policies consider carbon dioxide removal as a complement to drastic carbon dioxide emissions reductions, while establishing a credible accounting system and sustainable limits on BECCS.

Posted to public: 

Friday, November 20, 2020 - 19:06