Indeed the simulation results reported in this forum
are still preliminary. Considerable uncertainty remains in the projections of key parameters in the CGEM and in the evaluation of potentials for CDR development and storage capacities. In these simulations, however it has been demonstrated that combining DAC, CCS and emission trading, coupled with generous allocations, one may expect a reduction of the welfare cost for GCC countries by limiting the cost of stranded assets.
All other countries benefit also of this substantial
cost reduction of the global climate policy. The policy implications are the following:
- GCC countries should develop important R&D programs for DAC with CCS and clean fossil fuel production.
- GCC countries should be proactive in the establishment of a global emissions-trading system.
- GCC countries should negotiate a fair share of the remaining SCEB to compensate for the stranded asset risks.
- The development of an important CDR activity in GCC countries could be a new source of industrial development and valorization of resources.
- As DAC implementation reduces welfare cost for every country in the world, the cost of proof of concept at scale close to storage capacities like GCC countries could be shared within an international financing mechanism.
