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Valuation of Potential Risks Arising from a Model, Commercial-Scale CCS Project Site
With the CCS industry still in early stages of development, there is a need to understand the impacts and economic costs of the accidental release of CO2 at well-sited and appropriately managed CCS projects.
Responding to this need, a diverse group of organisations from industry, government, and the environmental community jointly sponsored Industrial Economics (IEc), an expert in environmental economics and natural resource damage assessment, to develop and test a model approach for valuing the economic damages arising from accidental release of CO2 and to develop a case study by applying the model to a ‘real world’ CCS project.
From the study, the sponsor group concluded that the tools exist to estimate prospective financial damages at CCS projects around the world, drawing on generally accepted practices within the financial and insurance industries.
Further, the study provides insights into the magnitude and timing of dollar amounts that are likely to be at risk and the conditions under which they may be at risk at a well-sited and appropriately managed CCS project.