Pricing Contracts Under Uncertainty in a Carbon Capture and Storage Framework

W. Cai, D. I. Singham, E. M. Craparo, J. A. White

Research output: Contribution to journalArticlepeer-review

10 Scopus citations

Abstract

Carbon capture and storage (CCS) has been demonstrated as a viable option for reducing carbon emissions to the atmosphere. We consider a situation where a tax on emissions is imposed on carbon dioxide (CO2) producers to encourage their participation in CCS. Operators of CO2 transportation pipelines and storage sites enter into individual contracts with emissions producers to store CO2. We study the problem of selecting the optimal price and volume of these contracts under both cost and emissions uncertainty to optimize the storage operator's expected profit.

Original languageEnglish (US)
Pages (from-to)56-62
Number of pages7
JournalEnergy Economics
Volume43
DOIs
StatePublished - May 2014

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Energy(all)

Keywords

  • Carbon capture and storage
  • Pricing
  • Uncertainty quantification

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