27 January 2011

Carbon Capture and Storage in the Clean Development Mechanism

The inclusion of Carbon Capture and Storage (CCS) in the UN's Clean Development Mechanism (CDM) is a boon for the Middle East and North Sea oil industries, which would use the scheme to subsidise the extraction of even more oil from the ground.

What was agreed?

“Carbon dioxide capture and storage in geological formations” is now eligible as a basis for CDM projects, as a result of the UN Climate Change Conference (COP16) in Cancun. This is likely to be of greatest benefit to oil companies, which are hastily rebranding techniques known as Enhanced Oil Recovery (EOR) as a means to store carbon underground.

EOR was originally developed as a means to extract more oil from fields that were reaching the end of their lifespan. This is still its primary purpose, rather than reducing emissions. If included in the CDM, a calculation of “reductions” would be made in relation to the amount of CO2 pumped into old oil wells. The calculation would not consider the far larger volume of CO2 released into the atmosphere through the extraction and burning of more oil. As has been seen with other CDM methodologies, the “lock in” effect of subsidising a fossil-fuel based energy model is not considered relevant to how offset “reductions” are calculated.

Looking further ahead, CCS is being promoted as “clean coal” in the electricity sector, as well as attracting interest from a variety of industrial sectors (notably, steel) that are keen to claim emissions reductions without engaging in a fundamentally cleaner development path or technological overhaul. What all of these technologies have in common is an assumption that the capture, transport and storage of carbon can be viably achieved on a large scale. This has not yet been proven, and there are many reasons to believe that this will be neither technically feasible nor economically viable.

The Cancun decision is not the end of the story of CCS in CDM. Implementing the agreement requires that a series of issues are “resolved in a satisfactory manner.” The decision catalogues a series of pitfalls, including the risk that CO2 storage is not permanent and could leak from underground geological formations. Other environmental and public health risks, and legal liabilities in the case of leaks or “damage to the environment, property or public health” remain to be addressed. The text of the decision also claims that projects will need to make “adequate provision for restoration of damaged ecosystems and full compensation for affected communities in the event of a release of carbon dioxide.” The CDM contains no mechanism to enforce such provisions, and the nature of the scheme (which is primarily a means for subsidising polluting industries) makes it unlikely that such provisions will emerge.

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