Development of a computable general equilibrium model representing direct air capture and carbon dioxide utilization

[Geoengineering News]

https://www.sciencedirect.com/science/article/pii/S2666278726000164

Authors: Osamu Nishiura, Shinichiro Fujimori, Ken Oshiro

15 May 2026

https://doi.org/10.1016/j.egycc.2026.100250

Highlights

•We developed a computable general equilibrium (CGE) model representing direct air capture (DAC)-related technologies.

•The model represents three sectors for carbon capture, storage, and utilization.

•DAC reduced the economic impacts caused by emission reductions.

•Irrational consumer choices related to synfuel may increase these economic impacts.

Abstract

The establishment of stringent climate goals resulted in the development of various technologies contributing to climate change mitigation. While most of them were developed, at least partially, for other purposes, carbon dioxide removal (CDR) and carbon dioxide capture, utilization and storage (CCUS) are the only technologies developed solely for the purpose of mitigation. Direct air capture (DAC) contributes to climate-change mitigation through CDR and the supply of low-emission fuels. Integrated assessment models (IAMs) have incorporated the latest mitigation technologies, supporting technology development and deployment as well as climate policy formulation. Most scenario studies targeting DAC have applied IAMs with partial equilibrium models at their core. This study developed a computable general equilibrium (CGE) model capable of analyzing mitigation scenarios considering DAC-related technologies. The model represents carbon dioxide capture via DAC, underground storage of captured carbon dioxide (DACCS), and the production and consumption of synthetic fuels. The model was applied to estimate mitigation scenarios based on the 1.5 °C climate goal, resulting in an estimated recovered CO2 by DAC of 14.3 Gt-CO2/year, of which 12.8 Gt-CO2/year was used for CDR. The remaining 1.51 Gt-CO2/year was used to produce synthetic fuels, supplying 27.2 EJ/year of liquid and gaseous fuels. These results demonstrate that DACCS can reduce the economic impact of emission reductions. However, the results also imply that greater synthetic fuel use could increase costs if consumers make irrational choices. A comparison of the mitigation scenarios quantified in this study confirmed that the CGE model is capable of quantifying mitigation scenarios that consider DAC-related technologies. We anticipate that this model will contribute to the formulation of mitigation policies and to the analysis of their economic impacts.

Source: ScienceDirect