Applied Micro Seminar : Every Tuesday
Time: 12:15 pm – 13:30 pm
Date: 21h of May
Room : 3001

Clement MAZET-SONILHAC (Bocconi University) “Capturing Subsidies or Storing Carbon: Evidence from the North Sea”

Abstract : As the world strives to achieve zero emissions by 2050, carbon capture and storage (CCS) has emerged as one of the key technologies in mitigating global warming, prompting governments – such as the USA with its $370 bn Inflation Reduction Act – to subsidize it massively. However, concerns remain that carbon storage may actually encourage additional carbon production, thus defeating the purpose of CCS. We investigate the impact of subsidies on CCS adoption, competition, production, and CO2 emissions in the North Sea oil & gas sector. For identification, we draw on the heterogeneity of geological reservoir suitability for CCS and on a landmark 1985 Norwegian Supreme Court decision that encouraged CCS in Norway, but not in the UK. Our findings suggest that oil majors respond to these subsidies by increasing production and developing more polluting fields, over 50 years of data.

Organizers:
Benoît SCHMUTZ (Pôle d’économie du CREST)
Clément MALGOUYRES (Pôle d’économie du CREST)
Sponsors:
CREST