Carbon capture and sequestration (CCS) could play a significant role in reducing greenhouse gas emissions in the future. The price associated with a metric ton of carbon dioxide reduction could help make CCS a more financially-viable technology. However, the value assigned to CCS depends on the type of greenhouse gas regulation chosen, such as a standard, greenhouse gas tax, or cap-and-trade system, and the details of how the market is implemented. This paper will cover ways in which CCS can be incorporated into greenhouse gas regulations and the implications of each of these methods. It will then cover how CCS is treated in current regulations for regulated entities.

This paper is the first in a two part series about the role of carbon capture and sequestration (CCS) in greenhouse gas regulations. This paper focuses on the various ways that CCS could be valued in different types of greenhouse gas markets while the second in this series focuses on how CCS could be valued as an offset and fungible in the market.