Incorporating carbon capture and storage technologies in integrated assessment models

Low-carbon emitting technologies are a key component of technical change in integrated assessment models. We develop a methodology for incorporating technologies into computable general equilibrium economic models and demonstrate this methodology by implementing carbon capture and storage technologies in the MIT Emissions Prediction and Policy Analysis (EPPA) model. Three primary implementation issues are discussed: characterization of the technical system, translation of bottom-up engineering information into an economic model, and the depiction of realistic technology adoption rates. The specification of input substitution, relative costs, and plant dispatch are the most critical factors in technology representation. Technology adoption rates in economic models are governed by exogenous and endogenous constraints. A comparison of the current approaches used in economic models with the theoretical and empirical factors affecting adoption rates highlights opportunities for refining the current methods.