Socio-economic impacts of future electricity generation scenarios in Europe: Potential costs and benefits of using CO2 Capture and Storage (CCS)

Abstract

Carbon capture and storage (CCS) is a potential key-technology to mitigate greenhouse gas (GHG) emissions as its use can lead to lower mitigation cost. However, research on other economic impacts of using CCS is scarce. In this paper, we look into economic upstream impacts of CCS use in terms of employment, Gross Value Added (GVA) and import dependency on the macro- and sector-level in Western Europe. We determine these impacts by a static comparison of two scenarios of power production with and without CCS (differences in energy efficiency investments between these scenarios were not accounted for). The two scenarios, both representing a stringent climate policy regime, were produced with the energy-system-simulation-model (TIMER) following the same emission profile until 2050. Data from the two scenarios were respectively implemented into a projected version of a global-multiregional IO-Model (EXIOBASE). Macro-level results suggest slightly higher gross employment, but lower Gross Value Added (GVA) (by 25%), and higher import dependency in the CCS-including scenario compared to the CCS-excluding scenario, given that biomass with CCS (BECCS) is available. Sector-level results show disproportionally higher differences between the scenarios in GVA and employment for some sectors compared to other sectors. Particularly, sectors providing fuels (here mostly bio-energy) have significantly higher GVA and employment in the CCS scenario. This study thus reveals interesting upstream economic effects, which can be linked to the technology choice. However, the exact quantitative results depend strongly on model assumptions. Results therefore need to be further explored in other models.