Impact of uncertain CCS deployment on EU climate negotiations

In this paper we propose a stochastic non-cooperative meta-game approach to assess the role of uncertain CCS deployment on climate agreements among 28 European countries. The game model is identified through statistical emulation of a large set of numerical simulations performed with the computable general equilibrium model GEMINI-E3. In this game the players are the 28 European countries, the payoffs are related to the welfare losses due to abatements and the strategies correspond to the supply of emission rights on the European carbon market. The paper then analyzes the potential contribution of the penetration of Carbon Capture and Storage (CCS) technologies to European CO2 abatements and the impact of CCS uncertainty pertaining to the rate of penetration of CCS technologies and to their cost on the design of burden sharing agreements.