Reply to ‘A commentary on “US power sector carbon capture and storage under the Inflation Reduction Act could be costly with limited or negative abatement potential”’

Here we reply to a comment by Dr. Robert Kennedy from the US Department of Energy (DOE) on our paper ‘US power sector carbon capture and storage under the Inflation Reduction Act could be costly with limited or negative abatement potential,’ which found that the 45Q carbon oxide sequestration tax credit incentivizes behaviors under profit-maximizing conditions that could increase rather than decrease GHG emissions in the power sector relative to a counterfactual without the tax credit. Our reply addresses claims that regulatory structures would prevent the negative outcomes we model in the original paper; that our cost and performance assumptions are inaccurate; and that other technologies will see growth. We show that the comment provides no evidence that our original analysis is incorrect and that information that has emerged since the March 2023 publication of our paper supports our assumptions, including public statements by carbon capture project proponents and new information about expected project costs. We agree with Dr. Kennedy that the incentives we highlight where 45Q might incentivize higher emissions at high cost are shocking; we disagree that we have incorrectly characterized these incentives. We share a belief that many of these loopholes can be closed, and disagree that they have already been closed.