An examination of country participation in carbon capture projects

Abstract

Carbon capture, utilisation and storage represents an important technology for countries to address climate change challenges, achieve decarbonisation and reach net zero targets. This study examines the factors that are association with country level participation in carbon capture projects. A Poisson regression model is employed to examine the relationship between country level factors (such as GDP per capita, regional partition, trade openness, economic complexity and tax initiatives) and the number of carbon capture project initiated within a country (from 2019 up until February 2023). We find that a country’s region (as defined by the World Bank), market affluence and level of CO₂ emissions is associated with a country’s participation in carbon capture projects. The results indicate that nations that are more affluent and have higher CO₂ emissions are associated with increase participation in carbon capture projects. Carbon tax and Emissions Trading Systems have a positive impact on a country’s participation in carbon capture projects, in particular carbon tax. This indicates that carbon tax acts as an effective incentive for industry engagement with carbon capture technologies. This study also examines the interplay between economic complexity and country level carbon capture project participation, where a negative relationship is observed.