The economics of air capture of CO2 in Canada

The Canadian government has committed to lowering national emissions to net-zero by 2050, but there are many uncertainties that could impact this transition. One of these uncertainties is the cost of emerging direct air capture (DAC) technology used to remove carbon dioxide from the atmosphere, while a second is whether the United States will commit to lowering their emissions to net-zero by 2050. In this study I use the gTech energy-economy model to assess how different assumptions about these uncertainties could impact the Canadian economy through this transition. I model eight different scenarios representing four different assumptions about DAC costs and availability, and two different assumptions about US emissions abatement. I find that higher availability and lower cost of carbon dioxide removal technology like DAC is correlated with a higher Canadian GDP in 2050, and that US abatement significantly affects the availability of these technologies.