Summary/Abstract
This paper assesses the regional incentives in deploying DAC under different assumptions about international climate policy and introduces a “clean oil” market via DAC as a way to provide incentives to oil exporting countries. Assuming global cooperation on a stringent climate policy, the paper finds that: (1) DAC is deployed only late in century, after other low carbon options, though at a very significant scale; (2) DAC has an impact on the marginal and total abatement costs (reducing them) and on the timing of mitigation (postponing it); (3) DAC also allows for a prolonged use of oil, with a positive welfare impact for energy exporting countries. Finally, the paper reviews the role of DAC in a less than ideal climate policy by exploring its potential for engaging energy exporting countries in climate mitigation activities by means of a “clean oil” market in which oil exporters can sell oil decarbonized via DAC.