Economics Carbon Sequestration Frequently Asked Questions
How much does it cost to capture carbon dioxide from a coal or natural gas fired power plant and store it underground?
It depends. Ninety-eight percent of all current power plants burn the fuel in air and exhaust a flue gas that is low pressure and contains carbon dioxide in dilute concentrations (3-12 volume %). Retro-fitting carbon dioxide capture to this facilities using existing technology is expensive. For pulverized coal plant the cost of carbon dioxide capture, transport, and storage in an underground formation would add at least 70-100% to the cost of electricity. Emerging R&D technologies are attempting to lower the cost to less than a 20% increase in the cost of electricity compared to a non-capture counterpart.
A new technology for coal-fired power plants, integrated gasification and combined cycle (IGCC), has much lower cost for carbon dioxide capture and storage because of inherent characteristics of the process. Equipping an IGCC plant for capture and storage would add at least 30% to the cost of electricity. Emerging R&D technologies are attempting to lower the cost to less than a 10% increase in the cost of electricity compared to a non-capture IGC counterpart.
Will agricultural producers get paid for terrestrial carbon sequestration?
In parts of the world that have signed the Kyoto Agreement, carbon markets have already began. In the United States a volunteer market exists called the Chicago Climate Exchange. It is possible that a private system of trading will be established, which could pay producers per acre. It is also possible that the government will provide certain incentives for producers to sequester carbon. In any case, carbon sequestration would increase soil organic matter due to:
a. Improved soil structure and quality
b. Improved soil productivity through increased organic matter
c. Reduced erosion through improved soil structure
d. Improved water quality through reduced erosion
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