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The relationship between a ‘polluter pays’ approach to carbon capture, regional policy and ‘just transition’ employment agendas
Climate Policy ( IF 5.3 ) Pub Date : 2022-08-18 , DOI: 10.1080/14693062.2022.2110031
Karen Turner 1 , Julia Race 2 , Oluwafisayo Alabi 1 , Antonios Katris 1 , Kim Swales 3
Affiliation  

ABSTRACT

Policy makers in a number of nations are currently developing carbon capture and storage (CCS) as an industrial decarbonisation solution, linking capture potential in industry clusters to domestic or overseas offshore storage capacity. However, the design, focus and timeframe for policy support are proving challenging in countries like the UK, where industry actors are concerned about the competitiveness implications of additional operational capital costs, while government aims to offer only transitory policy support. Policy-facing research is required to understand the drivers, nature and extent of potential competitiveness loss from adopting carbon capture in specific industry and country contexts, along with the impacts of policy decisions in other countries and of possible future technology improvements. We consider the case of the UK chemicals industry, using an economy-wide computable general equilibrium (CGE) model. This highlights how macroeconomic and sectoral impacts of concern under regional, industry and climate policy agendas depend on domestic and export demand responses to changing industry prices. A crucial question is whether capture costs are similarly reflected in international prices. We identify a risk of policy commitment to ‘polluter pays’ having sustained negative outcomes for capture firms, along with offshoring/leakage of jobs and GDP, and associated emissions, as demand shifts to lower cost overseas production. However, such costs could be reduced, and some capture industry gains realised, if competitors in other nations ultimately follow in bearing similar costs and particularly if ‘early mover’ action enables firms to make efficiency gains and build comparative advantage in operational carbon capture.

Key policy insights

  • A ‘polluter pays’ approach to industrial carbon capture risks triggering potential ‘offshoring’ of manufacturing activity in all timeframes where increased operational costs reduce the relative competitiveness of capture firms.

  • A border tax risks worse industry and wider economy outcomes, where domestic production is intensive in imports of the commodity in question.

  • Transitory policy support should focus on enabling capture firms to build efficiency in using carbon capture equipment while sustaining competitiveness and jobs within regional industry clusters.

  • Opportunities should be explored to develop comparative advantage where policy activity involves ‘early mover’ action on carbon capture.



中文翻译:

“污染者付费”碳捕获方法、区域政策和“公正转型”就业议程之间的关系

摘要

许多国家的政策制定者目前正在开发碳捕集与封存 (CCS) 作为工业脱碳解决方案,将产业集群的捕集潜力与国内或海外的海上封存能力联系起来。然而,政策支持的设计、重点和时间框架在英国等国家被证明具有挑战性,在这些国家,行业参与者担心额外运营资本成本对竞争力的影响,而政府的目标只是提供暂时的政策支持。需要进行面向政策的研究,以了解在特定行业和国家背景下采用碳捕获可能导致的竞争力损失的驱动因素、性质和程度,以及其他国家政策决策的影响和未来可能的技术改进。我们考虑英国化工行业的案例,使用经济范围内的可计算一般均衡 (CGE) 模型。这凸显了区域、行业和气候政策议程下关注的宏观经济和部门影响如何取决于国内和出口需求对不断变化的行业价格的反应。一个关键问题是捕捞成本是否同样反映在国际价格中。我们发现,随着需求转向成本较低的海外生产,“污染者付费”的政策承诺可能会对捕捞公司产生持续的负面影响,同时还会导致就业和 GDP 的离岸外包/流失,以及相关排放。然而,此类成本可以降低,并且一些捕获行业收益已实现,

关键政策见解

  • 工业碳捕获的“污染者付费”方法有可能在所有时间范围内触发制造活动的潜在“离岸外包”,因为运营成本增加会降低捕获公司的相对竞争力。

  • 边境税可能会使行业和更广泛的经济结果恶化,因为国内生产集中于进口相关商品。

  • 临时政策支持应侧重于使捕集公司能够提高使用碳捕集设备的效率,同时维持区域产业集群内的竞争力和就业机会。

  • 在政策活动涉及碳捕获的“先行者”行动时,应探索机会以发展比较优势。

更新日期:2022-08-18
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