Study: Property Values Rebound After CCS Projects

Carbon capture and sequestration is increasingly being recognized as a needed technology to reduce carbon dioxide emissions and reach a carbon-neutral atmosphere by 2050 in order to meet climate goals.

The technology, which is still largely in the development phase and subject to environmental and safety considerations, involves capturing CO2 at its source, compressing it for transportation, and storing it underground for long-term storage. Beyond storage, the captured CO2 can be reused for some industrial purposes, such as fertilizer and chemical production.

Deployment of CCS is growing with federal funding being distributed to spur technological advances. There are 28 active CCS projects in the U.S., with an additional eight projects underway.

Now a new study published by the National Bureau of Economic Research investigates the economic effect on housing values near CCS project sites. The findings reveal that homes within a 4.2-kilometer (2.6-mile) radius of CCS sites see an average price premium of 3.9%. Interestingly, this effect diminishes within 3 km of the sites, where residents living closer may express concerns about potential geological and health impacts. Those living within 3 km of a project see no price increase, while the premium increases for homes between 3 and 4.2 km from the site.

The researchers gathered data for 25 CCS projects in non-remote areas of the United States from the Global CCS Institute. This data included years in operation, ownership, technology used, and the industry where CO2 was utilized. They then obtained house prices (adjusted for inflation) from Zillow before and after the CCS sites became operational. By analyzing these prices, they determined how the price differences correlated with the distance of houses from the project sites.

The study noted that before CCS operations begin, home prices are lower than expected, and suggested that could be due to community concerns about potential risks, such as increased seismicity and pollution. The type of CCS project could also have an impact. However, after a project is operating, housing prices rebound.

“Our observed net positive effect suggests that, on average, the perceived benefits of CCS projects outweigh potential negative impacts on the community,” the authors state. The study suggests that those perceived benefits might be from a combination of factors, including better air quality, economic benefits, or other local considerations.

The study indicates that more study of the economic impact of CCS is needed, and suggests investigating the importance of the regulatory landscape, and whether the level of public awareness about CCS could have an impact.