Critical issues in management of carbon projects and markets: Analysis of economics of CCS in Indian context

Abstract

In recent times, climate change has captured the headlines on a frequent basis across the world. Climate change, in this context, broadly refers to changes in modern climate, such as global warming. An increasing number of people now believe in the connection between Greenhouse gas emissions and climate change (global warming). Greater awareness and publicity of the scientific findings surrounding global warming has resulted in political and economic debate. Kyoto protocol has been ratified, even with the exclusion of US. Another point of contention is the degree to which emerging economies such as India and China should be expected to constrain their emissions. In light of all this, it has become imperative for countries to reduce their emission of Greenhouse gases such as Carbon-dioxide. The main cause for Greenhouse gas emissions is attributed to burning of fossil fuels. These fuels, chiefly coal and petroleum, are used in: various industries, power generation and transportation means. A key attributor is energy generation. Majority share of electricity generation is currently coming from fossil fuels. Further, energy demand, esp. from emerging economies, is set to soar. International Energy Agency (IEA) forecasts that global electricity generation will double from 2005 to 20301. Fossil fuels will continue to comprise a significant part of energy mix globally. Renewable sources in all likelihood will contribute a minor portion of energy generation. The single largest fossil fuel in the energy mix is coal, contributing 40% of global energy mix in 2005, which is predicted to increase to 45% by 20302. Given this scenario, it is important to reduce Greenhouse gas emissions (such as Carbon-dioxide) from fossil fuel-based (esp. coal-based) energy generation sources. One of the solutions being proposed is Carbon Capture and Storage (CCS). Currently, CCS is the only known technology that can through capture reduce emissions to environment from fossil fuel-based power plants and other industries too.