Essays on investment in carbon capture technology: the role of markets, competitors and policy

  • Giorgio Cabrera

Student thesis: Doctoral Thesis


In this thesis, three different economic models under an industrial organization approach are presented modelling different types of carbon capture technology adoption. The thesis aims to understand the incentives that drive a carbon capture technology decision making at a firm level and develop policy solutions to inform government and policymakers to increase carbon capture technology adoption. The first model constructed considers a carbon capture and storage (CCS) technology adoption in different competitive environments. The focus is to explore how competition influences a firm’s decision toward CCS technology. The second model investigates the strategic interaction that firms experience in an industry where a firm adopts carbon capture and CO2 utilization (CCU). The model also evaluates the environmental impact of a CCU industry, as a major drawback of final goods produced by CO2 utilization is the carbon emissions are released back into the atmosphere once consumed in the final goods market. In this chapter, a series of policy solutions are proposed to obtain an increase in the adoption of CCU whilst accomplishing a positive environmental impact. The third model investigates the optimal CCS adoption decision time of a follower influenced by a learning-by-doing and spillover effect. A follower is a firm that adopts a second-generation CCS technology with a lower production cost caused by a learning effect from a pioneer. A pioneer is a firm that adopts a first-generation CCS technology with a high production cost, and it experiences a learning-by-doing effect. We discover, that if the adoption of CCS technology is sequential, a pioneer is always at an economic disadvantage by adopting first. The main contribution of this chapter recommends a policy solution that balances the adoption cost of a pioneer and a follower, achieving an increase in the diffusion of CCS technology.
Date of Award20 May 2022
Original languageEnglish
Awarding Institution
  • University Of Strathclyde
SponsorsUniversity of Strathclyde
SupervisorJohn Quigley (Supervisor) & Alexander Dickson (Supervisor)

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