CCS deployment policy choices under regional heterogeneity: Economy-wide impacts and spillovers in China

Carbon capture and storage (CCS) is critical for decarbonizing the fossil-energy power sector, the world's largest source of greenhouse gas emissions. However, how deployment responsibilities should be allocated across heterogeneous regions to deliver economy-wide economic and environmental benefits remains poorly understood. This study develops an integrated optimization–multi-regional input-output–computable general equilibrium (OP-MRIO-CGE) framework to evaluate the economic outcomes and emissions reduction effects of alternative regional CCS deployment policies, emphasizing cross-regional spillovers and implications for policy implementation. Using China as a case study, results show that outcomes are highly sensitive to regional responsibility allocation. Scenario 6 formulates deployment as a multi-objective problem maximizing decarbonized fossil-energy power generation and minimizing total CCS deployment cost. The objectives are evaluated separately through Pareto dominance, without normalization or objective weights, producing non-dominated allocations rather than a unique optimum. One allocation is randomly selected as the reference solution before its downstream MRIO-CGE outcomes are assessed, and sensitivity analysis covers the entire retained Pareto set. This reference solution reduces economy-wide CO 2 emissions by approximately 0.379 billion tonnes in 2030, increases national GDP by approximately USD 0.14 trillion, and improves consumer welfare by approximately USD 610 million. Concentrated CCS deployment in the Bohai Rim and the Junggar Basin increases emissions in non-host regions, including Sichuan, Hubei, and Anhui, while economic output losses occur in Shaanxi, Guangdong, and Jiangsu. These findings provide a quantitative basis for coordinated multi-regional CCS deployment and targeted complementary policies, offering an analytical framework applicable to other large, spatially heterogeneous economies pursuing deep decarbonization.

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Publication Details

Journal
Energy Policy
Published
2026-09-12
DOI
https://doi.org/10.1016/j.enpol.2026.115616
Primary Topic
Integrated Energy Systems Optimization
Type
article
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article

CCS deployment policy choices under regional heterogeneity: Economy-wide impacts and spillovers in China

Bolin Yu, Fei Li, Kun Xiao
Energy Policy
Integrated Energy Systems Optimization
article

CCS deployment policy choices under regional heterogeneity: Economy-wide impacts and spillovers in China

Bolin Yu, Fei Li, Kun Xiao
article en

Abstract

Carbon capture and storage (CCS) is critical for decarbonizing the fossil-energy power sector, the world's largest source of greenhouse gas emissions. However, how deployment responsibilities should be allocated across heterogeneous regions to deliver economy-wide economic and environmental benefits remains poorly understood. This study develops an integrated optimization–multi-regional input-output–computable general equilibrium (OP-MRIO-CGE) framework to evaluate the economic outcomes and emissions reduction effects of alternative regional CCS deployment policies, emphasizing cross-regional spillovers and implications for policy implementation. Using China as a case study, results show that outcomes are highly sensitive to regional responsibility allocation. Scenario 6 formulates deployment as a multi-objective problem maximizing decarbonized fossil-energy power generation and minimizing total CCS deployment cost. The objectives are evaluated separately through Pareto dominance, without normalization or objective weights, producing non-dominated allocations rather than a unique optimum. One allocation is randomly selected as the reference solution before its downstream MRIO-CGE outcomes are assessed, and sensitivity analysis covers the entire retained Pareto set. This reference solution reduces economy-wide CO 2 emissions by approximately 0.379 billion tonnes in 2030, increases national GDP by approximately USD 0.14 trillion, and improves consumer welfare by approximately USD 610 million. Concentrated CCS deployment in the Bohai Rim and the Junggar Basin increases emissions in non-host regions, including Sichuan, Hubei, and Anhui, while economic output losses occur in Shaanxi, Guangdong, and Jiangsu. These findings provide a quantitative basis for coordinated multi-regional CCS deployment and targeted complementary policies, offering an analytical framework applicable to other large, spatially heterogeneous economies pursuing deep decarbonization.

Energy PolicyVol. 220
Hong Kong Polytechnic University (HK), Zhongnan University of Economics and Law (CN), Development Research Center (CN), Hubei University of Technology (CN)
Openalex Percentile: Top 20%
Integrated Energy Systems Optimization
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