The political economy of carbon capture and storage: An analysis of two demonstration projects

Carbon Capture and Storage (CCS) technology is considered key to mitigating climate change by international institutions and governments around the world. The technology is considered advantageous because it may enable the continued utilization of fossil fuels while curbing carbon emissions. However, development of the technology remains slow on the ground. It is generally argued that large-scale, integrated demonstration projects are needed as a next step toward commercialization. Despite government support in several countries, few projects exist so far worldwide. This paper asks why it is so difficult to get demonstration projects off the ground. The argument is that it is not only project-specific factors that determine the feasibility of demonstration, but given the need for government support, a variety of political economy factors influence decision-making processes by policy makers and companies. The paper introduces an analytical framework developed on the basis of the political economy literature that considers six sets of factors that influence outcomes. It discusses two specific projects, Longannet in the UK and Quest in Canada, and explains why one failed and the other one is under construction. The analysis shows that although climate change has been a more important policy concern in the UK compared to Canada, the specific political economy situation of fossil fuel rich provinces like Alberta has led to the Quest project going forward.