Carbon sequestration options in the international climate regime

Abstract

The present thesis deals with carbon sequestration options in the Kyoto Protocol, namely carbon sequestration in the terrestrial biosphere and carbon dioxide capture and storage (CCS). Chapter 2 investigates the negotiation process on Land use, Land-use change and Forestry (LULUCF) under the United Nations Framework Convention on Climate Change. In chapter 3, market effects of the inclusion of forestry projects in the Clean Development Mechanism (CDM) are examined. For this purpose, marginal carbon sequestration cost curves representing different policy scenarios are developed and incorporated into a partial equilibrium model of the international market for emission offsets. An analysis based on marginal cost curves rests upon the underlying assumption that the amount of sequestration taking place is purely determined by the sequestration potential and the respective costs. However, other factors are likely to play a significant role for CDM investment flows as well. Therefore, apart from the mitigation potential of a CDM host country, the analysis in chapter 4 considers the investment climate and institutional CDM capacity as well. Based on these variables, a host country classification is elaborated using cluster analysis. The resulting classification provides a first picture of what the global distribution of CDM flows might look like. The subject of chapter 5 is the integration of carbon dioxide capture and storage into the international climate regime. Inventory and accounting issues are discussed against the background that CCS might be subject to cross-border projects and non-permanence of storage. Finally, economic implications of non-permanence are examined under varying assumptions on seepage and discount rates as well as crediting periods.