Gilles Lafforgue

Optimal Carbon Capture and Storage Policies

The IPCC recommends the use of carbon capture and sequestration (CCS) technologies in order to achieve the Kyoto environmental goals. This paper sheds light on this issue by assessing the optimal strategy regarding the long-term use of CCS technologies. The aim is to analyze the optimal CCS policy when the sequestration rate is endogenous, being therefore one specific tool of the environmental policy. We develop a simple growth model to identify the main driving forces that should determine the optimal CCS policy. We show that, under some conditions on the cost of extractions, CCS may be a long-term solution to curb carbon emissions. We also show that over time the social planner will choose to decrease the rate of capture and sequestration. We then derive the decentralized equilibrium outcome by considering the programs of the fossil resource-holder and of the representative consumer. Finally, we determine the optimal environmental policy, i.e. the carbon tax scheme, as well as the dynamics of the fossil fuel price needed to implement it.

Croissance durable, ressource épuisable et effort optimal d'exploration

In this paper, we show how a continuous exploration effort can relax the availability constraint of a non-renewable resource. The exploration process randomly yields discoveries, according to a distribution of probability which is both endogenous and non-stationary. Hence, we investigate the possibility of the economy to reach, in average, a sustainable growth path if the impatience of society is balanced by the positive effects of new deposit discoveries.