Regulating Carbon Capture and Storage in the European Union - An Economic and Legal Analysis

Sven Bode and Lars Dietrich

In: Carbon and Climate Law Review (2008), 2, pp. 71 - 76

Capture of CO2 produced during electricity and heat generation and the subsequent geological storage draws ever more attention in the discussion about emission reductions. This commentary discusses the importance of temporal and spatial system boundaries for competition among different CO2 abatement options, in the context of the European Emission Trading Scheme. Referring to the recent proposals of the Commission presented on January 23, 2008, we conclude that the proposal stipulates a sound approach from a theoretical perspective; however, stringent procedures during implementation in practice will be of crucial importance. Consequently, uncertainty for investors is still high. The arguments might be of interest for upcoming trading schemes such as in the US, too.