Description: Department Seminar

Location: 368A Heady Hall

Contact: David Hennessy

Title: Carbon Pricing and Global Innovation of Carbon Capture, Utilization and Storage Technology

Abstract: Carbon capture, utilization, and storage (CCUS) technology is a pivotal pathway toward achieving net-zero emissions worldwide. This paper illuminates global trends in CCUS innovation and diffusion and explores the causal driving factor of carbon pricing worldwide. The data pertain to the novel global assignee-level CCUS patents granted between 1990 and 2020. We leverage machine learning and natural language processing methods to classify worldwide CCUS patents into 60 individual technologies mapped into 11 application sectors and 9 technological readiness levels (TRL). We then unmask the spatial disparities in the CCUS innovation and diffusion across various application sectors and TRLs. Global CCUS innovation witnessed significant growth from 2009 to 2014, particularly in the cement sector, followed by a plateau period from 2015 to 2020. CCUS innovation has been highly concentrated in the top 10 countries, especially for CCUS technologies in hard-to-abate sectors, such as iron and steel. Taking advantage of the variations of global carbon pricing regulations across nations and years, we further leverage the differences-in-difference model to estimate the causal impacts of carbon pricing on assignees’ CCUS innovation. Empirical findings suggest that carbon pricing, mainly driven by emission trading schemes, plays a modest role in facilitating assignees’ innovation. This impact is particularly noticeable in sectors like chemical, power, and carbon management. The effects of carbon pricing facilitate the development of concepts, prototypes, and demonstration technologies but not the business uptake and mature ones.