Olivier Massol, the new Chair’s associated researcher, is associated professor at the l’IFPEN. He is PhD in economics (City University London), graduated ingeener at the IFP School and civil ingeener from the Mines (St Etienne, 1998). He is also a research master graduate in industry economics (Paris-Dauphine University) and has a bachelor and master’s degree in economics (Université of St Etienne).
Thinking about climate change, why should we consider Carbon Capture and Storage (CCS) as a tool to reduce greenhouse gas (GHG) emissions in the industrial sector ?
For a number of industries, tackling climate change is closely intertwined with the adoption of carbon capture capabilities. For years, the discussion on CCS technology has mainly focused on its potential deployment at thermal power plants while it is a potential source of carbon abatement for many industrial sectors, especially those where only a few alternatives exist (eg., iron and steel, cement). Yet, a large scale deployment of CCS is essential to achieve the ambitious environmental targets determined at both the national and international levels. Moreover, the combination of CCS technology with biomass as a fuel in the so-called Bio-CCS (i.e., Bioenergy with CCS) technologies can conceivably generate negative emissions as it can remove CO2 from the atmosphere and store it underground. Despite the recurrent calls for a fostered deployment of CCS technologies, CCS faces the reality of a slower-than-anticipated uptake. To date, only a handful of large-scale CCS projects have been commercially deployed. Against this background, we need to identify and understand the main barriers to CCS deployment and use that knowledge to design the adapted policies needed to overcome them.
According to your opinion, what are the main barriers for a large scale deployment of CCS ?
Beyond the purely technical aspects that have to be addressed in engineering, many economic issues must be addressed. Firstly, it is important to understand what are the underlying factors that drive emitters’ choices. For an industrial actor, investing in CCS technology is a choice with no possible U-turn and it might generate an addition of costs. This investment can be apprehended as an option where the associated rentability will depend on the carbon price trajectory as well as the cost of CCS technology. Uncertainty regarding these two aspects may lead to the adoption of delay behaviours by plant operators. Unlocking these strategies requires well-designed incentives policies such as fiscal advantages or norms obligation. Designing these policies is a tough task for authorities because both strategic interactions between actors and the current situation in the sector targeted must be included – identical frameworks may be implemented for local industries such as cement and/or industries subject to high competition like chemistry for instance. Regarding CO2 transport system, a burning issue is the building of the corresponding infrastructure. The achievement of this objective calls for a cooperation among emitters which is, as we can guess, not an easy task. On this point, recent researches suggest that imposing a non-discriminatory tariffs to infrastructures users may compromise the building of the grid.
Finally, issues link with storage of carbon remains to be addressed especially in a context where, at a local scale, communities are more and more concerned by projects related to the environment.
What would you say about your role within the Chair ?
I have been following the work produced by the Chair since its foundation in 2010. Its ambition can be summarized as follows: fostering the conduct of high-quality economic research based on sound theory to address the relevant (and often practical) policy problems raised by climate change. For an associate researcher like me, the Climate Economic Chair has several main characteristics : first, it establishes a communication link between companies, research centers, public decision makers, and academic institutions. By confronting these perspectives, researchers can both gain valuable insights to identify burning climate problems and find an opportunity to disseminate their work outside the usual academic arena. Second, the Chair is a beehive. It gathers talented researchers with different skills and visions and provides the conditions for a truly collaborative work among them. My experience at the Chair taught me that under these conditions, many ideas – that would otherwise have remained unexplored – have flourished and are currently being addressed. This is a great exemple of super-additivity where the joint value derived from cooperation is greater than the simple addition of the individuals’ skills.
Last but not least, the Chair is an incubator that allows young researchers to develop and carry out their academic projects thanks to stable financial means assigned to internships and PhD candidates.