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After dealing with the importance and necessity of CCS, the next step will be to review specific risks and concerns regarding CCS. It is significant to analyze CCS risks and concerns because they would be valuable sources in order to determine the content of any regulation contents and level of that regulation regarding CCS. Some valuable and reasonable analysis on possible concerns needs to be reflected if applicable in

61 See Benjamin Evar, Chiara Armeni & Vivian Scott, supra note 50, at 18.

62 See HyunJeong Noh et al, Discussion and Challenges on Inclusion of Carbon Dioxide Capture and Geological Storage (CCS) as Clean Development Mechanism (CDM) Projects Activities, JOURNAL OF THE KOREAN SOCIETY FOR MARINE ENVIRONMENTAL ENGINEERING Vol.15(3), 185 (2011).

establishing legal and regulatory system for CCS. In other words, in order to reduce, manage and resolve these concerns and risks, governance via regulatory oversight is needed, and such regulations should be grounded in laws. The concerns related to CCS are divided into three categories in this part. First, technical concern includes the

possibility of physical leaks of carbon dioxide. Second, administrative concern means the potential problem that regulations could not be effective due to the difference in the level of regulations. Finally, the financial concern looks at the cost burdens that can be

associated with CCS implementation from a variety of perspectives.

i. Technical leakage concern

In addition to the benefit of reducing the emissions of CO2 into the atmosphere and mitigating climate change, the technology has associated technical risks. The technical risks include both engineered and geological risks. The primary risk is the loss of integrity in the system and leakage of CO2 into the atmosphere, which was posed by CCS opponents, such as Greenpeace.⁶³ They say that this new technology will create many technical risks (e.g., low reservoir permeability that will require high pressure, leading to fracturing of the seal and leakage of carbon dioxide) both in the near future and in the long run.⁶⁴ They argue that CCS is a risky technology that could damage the environment and humans rather than protecting the global environment. As mentioned before, carbon dioxide under the CCS process is in a supercritical phase, a very dense

63 See GREENPEACE, supra note 36, at 21.

64 See David E. Adelman & Ian J. Duncan, The limits of liability in Promoting Safe Geologic Sequestration of CO2, 43 ELR 10646 (2013).

condition. It means that unlike carbon dioxide’s normal condition as a gas, chemically the supercritical phase of carbon dioxide could damage humans and the environment if leakage of carbon dioxide happens.⁶⁵

The leakage accidents could happen because of the erosion of pipelines or injection wells. The erosion could be the result of impurities mixed during the process of capturing carbon dioxide.⁶⁶ Additionally, there is a scientific concern that earthquakes might be a cause of carbon dioxide leakage by affecting possible sequestration sites, such as saline formations.⁶⁷ As for the method of leakage, two types of leakage are possible:

abrupt leakage by sudden leakage accidents; and gradual leakage, which progresses little by little.⁶⁸

Regarding the issue of when carbon dioxide leakage happens, it might happen during any point of the CCS process.⁶⁹ This could happen in a variety of places within the constructed portion of the CCS system. It means that both above the surface and below the surface could be where the leakage takes place in the case of onshore

65 See Mark A. Latham, supra note 35, at 45; INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE [IPCC], supra note8,at12.

66 JEFFREY LOGAN,ANDREA DISCH,KATE LARSEN &JOHN VENEZZA, supra note 4, at 2.

67 See Yvette Carr, The International Legal Issues Relating to the Facilitation of Sub-Seabed CO2

Sequestration Projects in Australia, AUSTRALIAN INT’L L.J. 137, 139 (2007); See Mark A. Latham, supra note 35, at 46.

68 See INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE [IPCC],supra note8,at13.

69 See Mark A. Latham, supra note 35, at 44; INT’L ENERGY AGENCY [IEA]GREENHOUSE GAS R&D PROGRAMME, supra note5,at12.

sequestration. When leakage accidents happen in offshore sequestration, the leakage place would be expanded to the ocean.⁷⁰ First, when a leakage accident happens above the surface, it could damage human beings directly. It is highly likely that the employees of the CCS relevant facilities or its neighborhood residents could be suffocated by

leakage accidents.⁷¹ Moreover, carbon dioxide disposed above the surface could damage animals, plants, and the environment (through air pollution).⁷² Second, there are risks to the subsurface, including groundwater contamination,⁷³ sterilization of other subsurface mineral resources, and the triggering of earthquakes. Third, leakage in the ocean could change and destroy the ocean ecosystem by killing marine organisms and aggravating ocean acidification, a significant problem in ocean environmental pollution issues.⁷⁴

As shown in the discussion of the risks of carbon dioxide leakage, CCS technology has various possible leakage scenarios. However, the potential scenarios should not be a reason to oppose the adoption of CCS technology. Current scientific

70 The leakage of carbon dioxide in a country or in a local area might influence other countries, a situation which is more likely in offshore sequestration which causes ocean pollution. Thus, in such a case, it could be said that there is a global leakage as well as a leakage in local areas. See JEFFREY LOGAN,ANDREA DISCH,KATE LARSEN &JOHN VENEZZA, supra note 4, at 1-2.

71 See Christopher Bidlack, Regulating the Inevitable: Understanding the Legal Consequences of and Providing for the Regulation of the Geologic Sequestration of Carbon Dioxide, 30J.LAND RESOURCES &

ENVTL.L. 199, 209 (2010).

72 See id; JEFFREY LOGAN,ANDREA DISCH,KATE LARSEN &JOHN VENEZZA, supra note 4, at 2; David Schwartz, supra note 46, at 44.

73 It could finally bring about a negative effect on human health due to the contamination of drinking water.

74 See INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE [IPCC],supra note8,at14.

evidence indicates that the possibility of actual leakage accidents is very low.⁷⁵ Even though there is a small chance of leakage accidents, it is necessary for leakage accidents to be prevented during the whole process of CCS by preparing a legal and regulatory system in advance.⁷⁶ The legal and regulatory system to set up requirements and

procedures can help to mitigate and manage risk occurrences. Meanwhile, there is a lack of analysis and evaluation on the possibility of leakage accidents regarding the long-term storage of carbon dioxide, a unique situation of CCS, which means that scientific

certainty about CCS risks and probability of leakage accidents is not high.⁷⁷ Therefore, a future important task will be the establishment of a legal and regulatory system focused on preparing for the leakage accidents that might happen after long-term storage of carbon dioxide. In other words, the legal system needs to be

analyzed and monitored for all the possible long-term risks as well as short-term risks.

Additionally, since CCS technology is composed of a series of processes (including capture, transport, injection, and sequestration), occurrence of leakage accidents in one

75 There are no carbon leakage accidents caused by the deployment of CCS under this time of developing commercialization of CCS technology. However, the accident that happened in 1986 in Cameroon, Africa, could be a good example for predicting future consequences that CCS leakage accidents might cause. In this accident, carbon dioxide in high concentrations was formed naturally in the lake Nyos, and the subsequent eruption of the carbon dioxide killed more than 1700 peoples and 3500 animals. See Mark A.

Latham, supra note 35, at 45. After the accident, there exists a current system to warn residents near the lake Nyos of a carbon dioxide leakage accident.

76 See JEFFREY LOGAN,ANDREA DISCH,KATE LARSEN &JOHN VENEZZA, supra note 4, at 2, see also INT’L RISK GOVERNANCE COUNCIL [IRGC],REGULATION OF CARBON CAPTURE AND STORAGE 12 (2008).

77 The fact that CCS requires long-term storage of carbon dioxide means that carbon dioxide leaks may occur not only abruptly after a long period of time but also gradually and slowly over a long period of time.

The slow leakage can offset the benefits of sequestering carbon dioxide, so it also needs to be carefully observed.

process could affect other processes. It will ruin the whole process of CCS and lead to CCS failure. For this reason, it is necessary for a country to have a comprehensive system in creating a CCS legal and regulatory system.

ii. Administrative leakage concern

There is a concern that the CCS technology would not contribute to solving the climate change problem of global warming because of administrative leakage.⁷⁸ As shown in the physical leakage concern, the risk of leakage accidents could be reduced with a strict regulatory system. However, only the strong and comprehensive governance in some limited countries could create another problem of market leakage.⁷⁹

Market leakage describes a situation where corporations are likely to transfer their greenhouse gas emissions from one country with stringent environmental regulation (e.g., carbon dioxide emission control) to other countries with loose environmental regulation.⁸⁰ Consequently, due to the market leakage under the theory of market economies, there is no change in total emission on a global level and there is no

78 The terms of market leakage and carbon leakage have been used to describe this concept. Since the term carbon leakage is thought to be confused with technical or physical leakage, this paper uses the terms administrative and market leakage.

79 See generally, ANDREA PEART,CARBON LEAKAGE:WHAT IS IT?POLICY OPTIONS FOR PREVENTING IT, CANADIAN LABOUR CONGRESS (Aug. 2010).

80 See Neil Peretz, Carbon Leakage under the European Union Emissions Trading Scheme: Is it a Major Policy Concern? 23 TUL.ENVTL.L.J. 57, 60 (2009).

environmental benefit in the end.⁸¹ However, the concerns of market leakage should not justify opposition to CCS technology. Rather, it is necessary to find a way to solve the market leakage problem. This market leakage problem would become worse when there is a huge difference on greenhouse gas reduction related policies.⁸² Therefore, as well as the establishment of domestic CCS systems, an international regulatory system for CCS is needed to somewhat unify each country’s CCS legal and regulatory system. Meanwhile, if a leakage accident does happen, it is not just a local environmental problem. It could bring about risks and damages on a global level. This possibility proves the need for uniformed international standards for CCS.⁸³

In conclusion, international norms regulating CCS, suggesting some standards to countries, is needed. It would help to mitigate the market leakage problem and to solve climate change problems substantially and effectively.

iii. Financial concern

The third concern is about the cost relevant to CCS technology development and

81 INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE [IPCC],supra note8,at13; Mark A. Latham, supra note 35, at 46. It could be said that the market leakage problem points to an invisible structural problem while physical leakage of carbon dioxide notes a visible and explicit environmental problem.

82 See ANDREI MARCU,CHRISTIAN EGENHOFER,SUSANNA ROTH &WIJNAND STOEFS,CARBON LEAKAGE: AN OVERVIEW,CENTRE FOR EUROPEAN POLICY STUDIES [CEPS] 5 (Dec. 2013).

83 See generally, Jonathan Baert Wiener, Global Environmental Regulation: Instrument Choice in Legal Context, 108YALE L.J. 677 (1999).

deployment. Greenpeace argues that the cost which has to be paid for CCS is too high.⁸⁴ The U.S. DOE points out an increase in the cost of electricity due to the introduction of CCS and the need for an intensive CCS RD & D effort to reduce this cost increase.⁸⁵ However, whether or not the CCS technology is a cost-effective technology should not be determined with a simple standard on how much money should be invested for CCS development and deployment. It is reasonable to analyze CCS costs with various comparative analyses. For example, other evaluation criteria could be included, such as future environmental benefits from the adoption of CCS technology, the environmental and economic damages without CCS technology, and the economic profits in case of the adoption of the CCS technology.⁸⁶ This CCS cost estimation can be conducted through various criteria.⁸⁷ In addition, the results of cost estimation can vary depending on the situation in each country or the level of capture technology development.⁸⁸ Because of

84 See GREENPEACE, supra note 36, at 27. Also, CCS opponents with skeptical views on the CCS costs also say that the CCS is an expensive technology when the cost includes social cost as well as economic cost.

See Jennie C. Stephens, Time to stop investing in carbon capture and storage, RESILIENCE, http://www.resilience.org/stories/2014-01-02/time-to-stop-investing-in-carbon-capture-and-storage

85 See DAVID BERNELL &CHRISTOPHER A.SIMON,THE ENERGY SECURITY DILLEMMA:USPOLICY AND PRACTICE (2016).

86 The CCS technology might foster contingent advantages, such as job creation. Also, incorporating CCS within the CDM could be a way to make an economic profit through CCS, which will be explained more in Section IV.

87 For example, the criteria for cost estimation may include capital cost, levelized electricity cost, and cost per tonne of carbon dioxide avoided. See GCCSI,THE COSTS OF CCS AND OTHER LOW-CARBON

TECHNOLOGIES IN THE UNITED STATES –2015UPDATE, 1-6 (July 2015).

88 For example, the results of the cost analysis conducted in China are evaluated to be lower than those of developed countries, which is a result of considering the lower construction and labor costs compared to developed countries. JiHyun Lee et al., Development of Techno-Economic Evaluation Model for CCS (Carbon Capture & Sequestration), J C C R V .7(2), 112 (2016). In this

this complexity of estimating costs, it is necessary to evaluate the economic status of CCS within the country in order for a more accurate estimation.⁸⁹ It is also important to analyze the competitiveness of CCS in terms of economic efficiency in comparison with other carbon dioxide reduction measures. According to a study on the cost of CCS in the United States, which is published by GCCSI, it has been analyzed as a competitive technology in economic efficiency compared to other options, such as nuclear, biomass, and solar thermal.⁹⁰ At an international level, there is an economic assessment granted by the IEA, which considers the expected economic damage that should be paid for curbing climate change in the future. This report states that the cost for mitigating climate change without CCS technology would actually increase by as much as 70 percent.⁹¹

However, it is true that an enormous cost factor is required to deploy CCS technology, even though CCS is analyzed as a cost-effective technology on the whole assessment.⁹² Therefore, the efforts, such as reducing the cost of CCS, allocating the cost

regard, there is a view that cost estimation that does not depend on developed countries’ data needs to be carried out in South Korea. Specifically, in South Korea, cost-effective capture techniques are still being developed, so it is necessary to adjust the CCS cost to reflect these realities.

89 Assessing cost in specific CCS projects is also important as well as overall CCS cost evaluation because the result of the cost evaluation can also affect the maintenance and cancellation of the project. For an example of cost estimates for individual projects, see IEAGHG(INTERNATIONAL ENERGY AGENCY GREENHOUSE GAS PROGRAMME),CCSCOST NETWORK -2016WORKSHOP,4-7 (March, 2016).

90 See GCCSI, supra note 87, at 8-11. As of 2014, the avoided cost per tonne of carbon dioxide for a plant in the Unites States was $48-109 for coal with CCS and $74-114 for natural gas with CCS. Nuclear and biomass were estimated at $8-28 and $54-70 respectively. On the other hand, solar thermal and solar PV(photovoltaincs) are estimated to be more expensive than other options, ranging from $108-191 for solar thermal and $101-225 for solar PV.

91 See Benjamin Evar, Chiara Armeni & Vivian Scott, supra note 50, at 19.

92 The process of capturing carbon dioxide is the most costly process. See PETER FOLGER, supra note 4, at 21.

effectively, and allowing for financial support if necessary, are needed. Reducing CCS cost is especially important because too high of a cost might be a problem in the relationship of carbon price.⁹³ When considering the possible expansion of the carbon trading system in the future, the cost of CCS deployment needs to be formed at a

reasonable level.⁹⁴ Therefore, the economic elements regarding CCS are significant and need to be reflected in setting up the legal and regulatory policies for CCS.

iv. Summary

The concerns pointed out by CCS opponents primarily deal with scientific uncertainty and economic efficiency. However, until now, there has been a lack of economic and scientific certainty on the concerns related to CCS according to both predictions and analyses. On the other hand, CCS technology is a necessary and

upcoming technology, approaching commercialization as a bridge technology. Therefore, it would be unwise to abandon a necessary new technology due to unproven and

unrealized risks. To ameliorate these concerns, a basic and important component of CCS deployment that needs to be established is the legal and regulatory framework. The legal and regulatory regime in preparation for the harms and risks of CCS technology could relieve the concerns that the opponents of CCS have. Also, the elements of economic and technical areas should be considered continuously to be efficient in all facets of CCS,

93 See SBCENERGY INSTITUTE,LEADING THE ENERGY TRANSITION:BRINGING CARBON CAPTURE &

STORAGE TO MARKET 53 (2012).

94 SeeINTERGOVERNMENTAL PANEL ON CLIMATE CHANGE [IPCC],supra note8,at12.

since they are still important in creating a CCS legal and regulatory structure.

The legal system should be comprehensive and strict in order to prevent possible leakage risks during the whole process of capture, transportation, and sequestration.

Additionally, the legal system needs to consider CCS facilitation, as well as a strong and comprehensive CCS regulation. It is because the CCS technology functions as a bridge technology, which becomes insignificant as it is delayed. Furthermore, the international system that deals with CCS relevant issues with unified standards is necessary for effective problem solving of the climate change crisis.

III. Required elements for CCS structure