Carbon capture and storage : efficient legal policies for risk governance and compensation / Michael G. Faure and Roy A. Partain.

Format:

Book

Author/Creator:

Faure, Michael (Michael G.), author.

Partain, Roy, author.

Language:

English

Subjects (All):

Carbon sequestration.

Carbon sequestration--Economic aspects.

Climate change mitigation.

Physical Description:

1 online resource (xii, 360 pages)

Place of Publication:

Cambridge, Massachusetts : The MIT Press, [2017]

System Details:

text file

Summary:

A theoretical and practical analysis of the complex liability issues raised by carbon capture and storage systems for containing greenhouse gases.

Contents:

1 Introduction 1

1.1 Carbon Capture and Storage: Risks and Rewards 1

1.2 Goals and Methodology of This Book 4

1.3 Limits of Its Goals 6

1.4 Structure of This Book 7

2 Survey of CCS Technologies and Risks 11

2.1 Nature and Scale of Subterranean Storage Structures 12

2.1.1 Geology, Geochemistry, and Geophysics 12

2.1.2 Global Storage Capacity 15

2.2 CO₂ Injection and Storage 17

2.2.1 Based on Preexisting Technologies 17

2.2.2 Methods and Techniques 19

2.3 Historical CO₂ Venting from Subterranean Reservoirs 21

2.4 Risks from CCS Activities 24

2.4.1 Fugitive CO₂ and Other Migrating Fluids 26

2.4.2 Risks from Surface and Atmospheric Events 29

2.4.3 Risks from Subterranean Events 32

2.5 Of Permanence, Risk, and Remedies 39

2.5.1 Identification of Long-Run Risks 40

2.5.2 Remedies for Migration Problems 41

2.6 Summary 43

3 Clarifying Liability Rules for CCS 47

3.1 Scholastic Calls for Clarification of CCS Liability Rules 48

3.2 Multiple Rules of Overlapping Civil Liability 57

3.2.1 Strict Liability 58

3.2.2 Trespass 60

3.2.3 Nuisance 62

3.2.4 Negligence 63

3.3 Law and Economics on the Role of Civil Liability Rules 65

3.4 Evaluating Strict Liability for CCS 68

3.4.1 Abnormally Hazardous Activities 69

3.4.2 Dominant Actor Accidents (Unilateral Accidents) 75

3.4.3 Novel and Uncertain Risks 77

3.4.4 Efficiency of Bespoke Safety Plans (Policy of Decentralization) 78

3.4.5 Overwhelming Transaction Costs of Justice 79

3.5 Evaluating Negligence for CCS 81

3.5.1 Risk Aversion and Imperfect Insurance 81

3.5.2 Insolvent Tortfeasors 83

3.5.3 Strategic Avoidance of Liability by Tortfeasors 84

3.5.4 Inaccurately Determined Damages 85

3.6 Conclusion and Results 86

4 Policy Options for CCS Liability Rules 89

4.1 Refocusing on the Goals and Limits of Liability Rules 89

4.2 Determination of Responsible Actors 91

4.2.1 Stakeholders 91

4.2.2 Property Law Clarifications 93

4.3 Force Majeure 95

4.4 Attribution of Liability 96

4.5 Effect of Regulation 97

4.6 Causation 99

4.7 Joint and Several Liability 101

4.8 Remedies: Limited Financial Amounts? 102

4.9 Conclusion and Results 104

5 Postclosure Liability Transfers and Indemnifications 107

5.1 Long-Term Liability Issues 108

5.2 Latency Period Planning and Civil Liability Rules 110

5.2.1 Scope of Polluter Pays 112

5.2.2 Risk of Operator Extinction 113

5.2.3 Support of Nascent Industry 114

5.3 Addressing Externalities and Beneficiaries 116

5.4 Policies in Place 117

5.4.1 In European Countries 118

5.4.2 In North America 119

5.4.3 In Australia 122

5.5 Conclusion 123

6 Publicly and Privately Regulating CCS Activities 125

6.1 Evaluating Public Regulations for CCS 126

6.1.1 Regulations Work When Civil Liability Rules Would Fail 127

6.1.2 Addressing Asymmetric Information 129

6.1.3 Information-Revealing Mechanisms 131

6.1.4 Operating beyond Monetary Incentives 132

6.1.5 Ensuring Resolution of Injuries and Damages 134

6.1.6 Powerful When Court Institutions Are Weak 137

6.1.7 Public Regulations Can Be Inefficient Too 137

6.2 Evaluating Private Regulations for CCS 138

6.2.1 Theory of Private Regulation 139

6.2.2 Advantages of Self-Regulation vis-à-vis Public Regulation 140

6.2.3 Disadvantages of Self-Regulation over Public Regulation 144

6.3 Regulations Benefit from Availability of Civil Liability Rules 144

6.3.1 Civil Liability Rules Improve Regulatory Efficacy 145

6.3.2 Civil Liability Rules Defend the Function of Regulatory Designs 146

7 Compensation via Market-Based Measures 149

7.1 Goals of Compensation for CCS Policy 150

7.2 Insurance for CCS 151

7.2.1 Insurance and Risk Aversion 152

7.2.2 Barriers to Market Entry 154

7.2.3 Dealing with Insurer Ambiguity 156

7.2.4 Predictability of CCS-Related Risks 157

7.2.5 Cover in Time 158

7.2.6 Capacity 161

7.2.7 Curing Moral Hazard and Adverse Selection 163

7.2.8 Insurability of CCS? 166

7.3 Alternative Compensation Mechanisms 168

7.3.1 Self-Insurance and Captives 169

7.3.2 Risk-Sharing Agreements 171

7.3.3 Guarantees and Deposits 177

7.3.4 Financial Provisions: Letters of Credit and Bonding Instruments 179

7.3.5 Capital Accounts: Trust Funds and Escrow Accounts 183

7.3.6 Conclusion 183

8 Compensation Using Public Resources 185

8.1 Compulsory Financial Guarantees? 186

8.2 Direct Compensation by Government? 189

8.3 A Compensation Fund for CCS-Related Damage? 194

8.4 Compensation Fund: A Second Best Solution? 199

8.5 Reinsurer of Last Resort 200

8.6 Creation of a Public CCS Utility 203

8.7 Conclusion 204

9 Policy Recommendations 207

9.1 A Review of the Policy Recommendations 207

9.1.1 Foreseeable Risks and Potential to Mitigate or Remedy 207

9.1.2 Choice of Strict Liability over Negligence 208

9.1.3 Determination of Liable Parties 209

9.1.4 Disarming Regulatory Defense and Force Majeure 210

9.1.5 No Caps to Liability Exposure 211

9.1.6 Planning for Operator Extinction 211

9.1.7 The Need for Both Public and Private Forms of Regulation 212

9.1.8 Private Market Means of Compensation 213

9.1.9 Public Resource Means of Compensation 213

9.1.10 CCS Storage Is Welfare Enhancing 214

9.2 Climate Change Liability 215

9.3 Position of Developing Countries 215

9.4 Concluding Observations 216.

Notes:

OCLC-licensed vendor bibliographic record.

ISBN:

9780262337311

0262337312

OCLC:

982288045

Access Restriction:

Restricted for use by site license.