Carbon capture, utilisation and storage: Incentives, effects and policy

• We develop a model of carbon capture and utilisation where firm invests in sells proportion its captured CO 2 emissions the market for . investigate environmental effect ensuing increase supply on behaviour firms that use as an input. The production these has ’rebound effect’ counteracts initial emission reduction associated with capture. discuss policy interventions to support while accounting this rebound effect. explore incentives, consequences, implications related utilising carbon. Our incorporates decision by considering investing technology, well By including latter, we (from sources) equilibrium price, allowing us accurately understand revenue will receive. More importantly, it also allows input: price lowers their marginal cost production, encouraging them produce more. offsetting ‘rebound’ effect, can consequences utilisation. our analysis.