Global CCS Institute - Day 2 - Panel 5 - Defining and Quantifying CCS Risk and Liability

Uploaded on

Chris Clarke - University College London

Chris Clarke - University College London

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads


Total Views
On Slideshare
From Embeds
Number of Embeds



Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

    No notes for slide


  • 1. PANEL 5DEFINING AND QUANTIFYING CCS RISK AND LIABILITYSandra Locke – Government of AlbertaChiara Trabucchi – Industrial EconomicsChris Clarke – University College London
  • 2. LONG TERM LIABILITY RISK: THE PUBLIC POLICY DIMENSION (GCCSI International Members’ Meeting Calgary, 10-11 October 2012) CHRIS CLARKE Visiting Fellow, Carbon Capture Legal Programme, Faculty of LawsUniversity College LondonCentre for Law and the Environment, Bentham HouseEndsleigh GardensLondon WC1H 0EGTel: +44 (0)20-8348 5589 (Dir); +44 (0)20-7679 1504 (Centre)email:
  • 3. Multiple liability regimes• first tier: – CCS laws & regulations • site selection/construction, operation, post-injection care • remedial action in cases of leakage or significant irregularity • financial security + financial contribution • specified obligations under associated laws – emissions allowances/credits – wider clean-up duties• second tier: – liability/clean-up rules under other laws • contaminated land, water pollution, waste, nature conservation – civil/common law liability • personal injury, property damage + some economic loss
  • 4. Transfer of responsibility• a major concession, but not unlimited• transfer conditions & tests – closure/removal/reclamation + financial contribution – permanent containment, absence of leaks, trend towards stability• limits to transfer – covers all obligations under CCS & associated laws, but – liability continues under other regimes unless expressly specified• fault clause & grounds for re-opening – ambiguous standards (negligence, deficient data, etc) – in extremis?• unresolved issues/incomplete remediation
  • 5. Moving goalposts• with long timescales, the rules will change – standards in 2040, 2050 or 2070 will not be the same as today – those standards will determine future obligations, eg: • how much remediation operator has to do • how stringent the transfer conditions are – development risk + regulatory risk• government commitments have a limited life – legal rules an important constraint, but not absolute in long run – science changes, political mood changes ⇒ govts have to react• liability burden also about (future) public policy• need strategy & mechanisms to manage that risk – promote excellence, maximise self-regulation, protect goodwill
  • 6. Three key factors• performance – less damage ⇒ less liability (!) – confirmation that CCS works • the technical safety case is correct, the risks are minimal – not just operator’s own site(s) - also CCS worldwide• reputation – a valued contribution to climate change mitigation/env goals – despite changes in scientific understanding – public confidence, despite changing political priorities• harm – scale/seriousness if it occurs: manageable mishaps v major events – effectiveness of detection & response action – never underestimate the consequences of a serious event
  • 7. Insurance/financial security• perfectly sensible idea, if implemented reasonably – protect the environment & the taxpayer/ensure obligations are met• policy muddle (in some jurisdictions?) – needs to be taken more seriously at legislative/policy stage – history of regulatory failures & problems• potential roadblock to CCS deployment• need to be clear about: – the purpose: what is it for? what is it supposed to achieve? – the amount: how much security is needed? how is that calculated? – capacity: how much is possible, by various means? – technical & legal constraints: financial services law, insolvency, etc• not a panacea or a magic wand
  • 8. Financial security: suggestions• helpful to make three distinctions: – technical v. political issues – unavoidable obligations v. contingent liability risks – risk transfer v. non-risk transfer products• the amount is fundamental – very large amounts may require radical/collective solutions• some discounting for probability is inevitable• all options should be on the table – individual provision, phasing, pooling mechanisms, financial tests – different solutions for different jurisdictions• emissions allowance risk a special problem• financial services expertise is essential