The role of CCS in industry clusters in delivering value to the political economy
Why is this research needed?
Government departments responsible for energy and climate policy around the world, partly informed by low carbon energy system projections, have demonstrated support for development of carbon capture, use and storage (CCUS). However, as evidenced by the 2015 withdrawal of financial support for the UK CCS Commercialisation Competition, it has proven challenging to convince national treasuries of the merits of public support. For those budget holders, CCS may essentially be seen as a complex, expensive pollution control system that requires extensive up-front investment and adds to production costs. Our work at the Strathclyde Centre for Energy Policy (CEP) aims to move consideration of and narrative development around CCUS into the public policy domain that encompasses not only energy and climate, but also economic and social policies.
What is this research investigating?
The focus of the specific project under the UKCCSRC umbrella is to build on our previous ‘economic multiplier’ analyses (how many jobs/how much GDP across the wider economy is ultimately supported by the direct activity of any one industry?) for Scotland and the UK. We do so by developing methods for more in-depth consideration of the interactions and interdependences between different industries in high value clusters. Taking the Grangemouth cluster in Scotland as an initial applied example, we develop new methods of accounting for and reporting the nature of high value chains activity that support jobs and GDP via up- and down-stream supply chains within and beyond the geographical boundaries of the cluster. We develop methods to consider the potential implications of contraction or growth in any one industry for the strength of domestic jobs and GDP multipliers supported by others, and how the introduction of CCUS may impact these crucial value chains.
What does the research expect to achieve?
A crucial element of this project is our continued focus on developing rigorous and transparent methods of wider economy analysis that are trusted by key decision makers such as HM Treasury and devolved UK governments. We focus on ensuring the outcomes reported are understood by and communicated effectively to a range of policy and industry stakeholders. To this end there will be an active programme of engagement and communication through the CEP and UKCCSRC websites.
The initial stage of our work culminated in 2018 through a series of policy briefing and research activities impacting at European and UK levels, through our evidence to the UK CCUS Cost Challenge Taskforce, and our contribution to the July 2019 Zero Emissions Platform report on ‘The Role of CCUS in a Below Two Degrees Scenario’, regarding the need to take a wider economic prosperity view on the role and potential deployment of CCUS. The former underpinned a key recommendation in the Taskforce report and fed through to consideration of CCUS infrastructure in an industrial cluster context in the UK Government’s 2018 ‘Action Plan’.
This project is timely in terms of our continued contribution to the momentum building around understanding CCUS in this way. It will coincide with a new pan-European collaboration in which CEP is involved, funded by the Norwegian Research Council. This enables interaction with researchers similarly considering the role of CCUS in the wider political economy context of another oil and gas producing nation where the presence of off-shore storage capacity lays foundations for CCUS as an industrial opportunity. Our strong ties with colleagues at TU Delft in the Netherlands and the ZEP network also provide opportunities to draw on and learn from CCUS development in the context of both regional industrial clustering, alongside international supply chain and trade networks.