Carbon-Capture Projects Are Viable at $50 a Ton, Stern Says

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Jan. 19 (Bloomberg) — Permits to release a ton of carbon dioxide into the sky need to cost about $50 each, or three times Europe’s current price, for companies to invest in experimental technology to trap the greenhouse gas, Nicholas Stern said.

Projects that capture and safely bury CO2 underground must be developed to play a role in controlling global emissions of the global-warming gas during the next 20 to 30 years, the London School of Economics professor said today in televised remarks at the World Future Energy Summit in Abu Dhabi.

Power-plant operators, scientists and economists worldwide are investigating the unproven technology to determine whether it could safely and economically store the greenhouse gas below ground where it will not contribute to global warming.

“The carbon price I’d point to would be the kind of price that in the medium term could sustain” running capture and storage plants, said Stern, forecasting $50 a ton. Stern published a widely cited report for the U.K. government in 2006 on the economics of climate change.

Under European laws that set emissions limits and carbon trading rules, industrial polluters are required to own permits to release each ton of CO2 they produce. European emissions permits for 2009 currently trade at about 12 euros ($15.) At that price it would be cheaper for a coal-burning plant to buy an allowance than invest in devices to bury CO2, the main global-warming gas produced by igniting fossil fuels.

Carbon capture and storage will be vital to the United Nation’s goal to halve global emissions by 2050, according to the Paris-based International Energy Agency, adviser to the U.K., the U.S. and 26 other oil-importing nations.

Stern backs a mix of renewable energy technologies as well as carbon capture to trim emissions to avert the worst impacts of global warming.

The 27-nation European Union plans to subsidize as many as 12 demonstration plants for carbon capture to test the feasibility of catching emissions from power plants and pumping them underground.