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2019 | OriginalPaper | Chapter

8. Carbon Pricing to Promote Green Energy Projects

Policy Options

Author : Takashi Hongo

Published in: Handbook of Green Finance

Publisher: Springer Singapore

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Abstract

The “2-degree target” under the Paris Agreement is challenging, and green energy is the key to the transformation of the energy sector. “All energy, all technology” should be the basic approach for green energy. Carbon capture and storage (CCS) is an important option, but a critical barrier for CCS is its economics. In general, it will not be realized without sufficiently high carbon pricing. Also, carbon pricing is an effective instrument for comparing the economics of various technology options, including renewable and fossil fuel with CCS, and indicates the target cost for technology and finance innovation.
Carbon capture, utilization, and storage (CCUS), such as CO2 enhanced oil recovery (EOR), generates cash flow with or without carbon pricing and a CO2 EOR project as CCS is implemented by a combination of R&D subsidies and commercial base finance. Green finance may support CCUS projects when certain conditions are satisfied.
The barriers to further use of green finance for CO2 EOR projects are the high CO2 capture cost, oil price volatility, the long-term liability of safe containment, and carbon pricing. An idea for fast-tracking to CCS is low-carbon jet fuel because its demand is certain. Accumulation of experience of CCS by low-carbon jet fuel will push technology innovation and cost down and accelerate the green transformation in the energy sector. CCS/CCUS should be a target of green finance for green energy.

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Literature
go back to reference Hongo T (2015) Financial options for CO2–EOR − how can we use market-based mechanisms? Expert workshop: using CO2–EOR in the Gulf States to reduce CO2 emissions. Masdar Institute/International Energy Agency/Economic and Social Commission for Western Asia (ESCWA), Jan 2015 Hongo T (2015) Financial options for CO2–EOR − how can we use market-based mechanisms? Expert workshop: using CO2–EOR in the Gulf States to reduce CO2 emissions. Masdar Institute/International Energy Agency/Economic and Social Commission for Western Asia (ESCWA), Jan 2015
go back to reference Hongo T (2017) CO2 Emission Reduction by CO2 EOR and Low Crbon Furl for Aviation, CCS and Hydrogen in the framework of Collaboration in studies on technologies toword low carbon energy system in Saudi Arabia Japan Visoin 2030, December 10, 2017 Hongo T (2017) CO2 Emission Reduction by CO2 EOR and Low Crbon Furl for Aviation, CCS and Hydrogen in the framework of Collaboration in studies on technologies toword low carbon energy system in Saudi Arabia Japan Visoin 2030, December 10, 2017
go back to reference Hongo T, Venkatachalam A (2015) Reforms for private finance, toward green growth in Asia, Chapter 7. In: Venkatachalam A, Kawai M, Lohani BN (eds) Managing the transition to a low-carbon economy. Asian Development Bank (ADB) and ADB Institute, Tokyo, pp 251–277 Hongo T, Venkatachalam A (2015) Reforms for private finance, toward green growth in Asia, Chapter 7. In: Venkatachalam A, Kawai M, Lohani BN (eds) Managing the transition to a low-carbon economy. Asian Development Bank (ADB) and ADB Institute, Tokyo, pp 251–277
go back to reference International Energy Agency (IEA) (2017a) World energy outlook 2017. IEA, ParisCrossRef International Energy Agency (IEA) (2017a) World energy outlook 2017. IEA, ParisCrossRef
go back to reference International Energy Agency (IEA) (2017b) Energy technology perspective 2017. IEA, ParisCrossRef International Energy Agency (IEA) (2017b) Energy technology perspective 2017. IEA, ParisCrossRef
Metadata
Title
Carbon Pricing to Promote Green Energy Projects
Author
Takashi Hongo
Copyright Year
2019
Publisher
Springer Singapore
DOI
https://doi.org/10.1007/978-981-13-0227-5_21

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