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Energy substitutions, climate change and carbon sinks

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Author Info
Lafforgue, Gilles
Magné, Bertrand
Moreaux, Michel

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Abstract

We determine the optimal exploitation time-paths of two energy resources, one being depletable and polluting, namely a fossil fuel, the other being renewable and clean. These optimal paths are considered along with the two following features. First, the cumulative atmospheric pollution stock is set not to exceed some critical threshold and second, the polluting emissions produced by the use of fossil fuel can be reduced at the source and stockpiled in several carbon sinks of limited capacity. We show that, if the renewable resource flow is abundant, the optimal path requires that sequestration is implemented only once the ceiling is reached. Moreover, the reservoirs should be completely filled by increasing order of their respective sequestration costs.

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Publisher Info
Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 67 (2008)
Issue (Month): 4 (November)
Pages: 589-597
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Handle: RePEc:eee:ecolec:v:67:y:2008:i:4:p:589-597

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Web page: http://www.elsevier.com/locate/ecolecon

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Keywords: Non-renewable resource Pollution target Climate change Carbon sequestration and storage Hotelling;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Lewis, Tracy R, 1982. "Sufficient Conditions for Extracting Least Cost Resource First," Econometrica, Econometric Society, vol. 50(4), pages 1081-83, July. [Downloadable!] (restricted)
  2. Chakravorty, Ujjayant & Moreaux, Michel & Tidball, Mabel, 2006. "Ordering the Extraction of Polluting Nonrenewable Resources," IDEI Working Papers 415, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
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  3. Kemp, Murray C & Long, Ngo Van, 1980. "On Two Folk Theorems Concerning the Extraction of Exhaustible Resources," Econometrica, Econometric Society, vol. 48(3), pages 663-73, April. [Downloadable!] (restricted)
  4. GAUDET Gérard & MOREAUX Michel & WITHAGEN Cees, 2006. "The Alberta dilemma: Optimal sharing of a water resource by an agricultural and an oil sector," Working Papers 06.06.199, LERNA, University of Toulouse. [Downloadable!]
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  5. Lafforgue, Gilles & Magne, Bertrand & Moreaux, Michel, 2006. "Optimal Sequestration Policy with a Ceiling on the Stock of Carbon in the Atmosphere," IDEI Working Papers 401, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
  6. Favard, Pascal, 2002. "Does productive capital affect the order of resource exploitation?," Journal of Economic Dynamics and Control, Elsevier, vol. 26(6), pages 911-918, June. [Downloadable!] (restricted)
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  7. Kurosawa, Atsushi, 2004. "Carbon concentration target and technological choice," Energy Economics, Elsevier, vol. 26(4), pages 675-684, July. [Downloadable!] (restricted)
  8. Geoffrey Heal, 1976. "The Relationship Between Price and Extraction Cost for a Resource with a Backstop Technology," Bell Journal of Economics, The RAND Corporation, vol. 7(2), pages 371-378, Autumn. [Downloadable!] (restricted)
  9. Im, Eric Iksoon & Chakravorty, Ujjayant & Roumasset, James, 2006. "Discontinuous extraction of a nonrenewable resource," Economics Letters, Elsevier, vol. 90(1), pages 6-11, January. [Downloadable!] (restricted)
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  10. Amigues, J.-P. & Favard, P. & Gaudet, G. & Moreaux, M., 1996. "On The Optimal Order of Natural Resourse Use When the Capacity of the Inexhaustible Substitute is Limited," Papers 96.431, Toulouse - GREMAQ.
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  11. Ujjayant Chakravorty & Darrell Krulce & James Roumasset, 2003. "Specialization and Nonrenewable Resources: Ricardo meets Ricardo," Emory Economics 0305, Department of Economics, Emory University (Atlanta). [Downloadable!]
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  12. Gerard Gaudet & Michel Moreaux & Stephen W. Salant, 2001. "Intertemporal Depletion of Resource Sites by Spatially Distributed Users," American Economic Review, American Economic Association, vol. 91(4), pages 1149-1159, September. [Downloadable!] (restricted)
  13. Chakravorty, Ujjayant & Krulce, Darrell L, 1994. "Heterogeneous Demand and Order of Resource Extraction," Econometrica, Econometric Society, vol. 62(6), pages 1445-52, November. [Downloadable!] (restricted)
  14. Chakravorty, Ujjayant & Magne, Bertrand & Moreaux, Michel, 2006. "A Hotelling model with a ceiling on the stock of pollution," Journal of Economic Dynamics and Control, Elsevier, vol. 30(12), pages 2875-2904, December. [Downloadable!] (restricted)
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  15. Kolstad, Charles D. & Krautkraemer, Jeffrey A., 1993. "Natural resource use and the environment," Handbook of Natural Resource and Energy Economics, in: A. V. Kneese† & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 3, chapter 26, pages 1219-1265 Elsevier. [Downloadable!] (restricted)
  16. Holland, Stephen P., 2003. "Extraction capacity and the optimal order of extraction," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 569-588, May. [Downloadable!] (restricted)
  17. Hartwick, John M. & Kemp, Murray C. & Van Long, Ngo, 1986. "Set-up costs and theory of exhaustible resources," Journal of Environmental Economics and Management, Elsevier, vol. 13(3), pages 212-224, September. [Downloadable!] (restricted)
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  18. Riahi, Keywan & Rubin, Edward S. & Taylor, Margaret R. & Schrattenholzer, Leo & Hounshell, David, 2004. "Technological learning for carbon capture and sequestration technologies," Energy Economics, Elsevier, vol. 26(4), pages 539-564, July. [Downloadable!] (restricted)
  19. Chakravorty, Ujjayant & Magne, Bertrand & Moreaux, Michel, 2004. "Plafond de concentration atmosphérique en carbone et substitutions entre ressources énergétiques," IDEI Working Papers 260, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Alain Ayong Le Kama & Mouez Fodha & LAFFORGUE Gilles, 2009. "Optimal Carbon Capture and Storage policies," Working Papers 09.24.300, LERNA, University of Toulouse. [Downloadable!]
  2. GRIMAUD Andre & LAFFORGUE Gilles & MAGNE Bertrand, 2009. "Climate change mitigation options and directed technical change: A decentralized equilibrium analysis," Working Papers 09.20.296, LERNA, University of Toulouse. [Downloadable!]
  3. Grimaud, André & Lafforgue, Gilles & Magne, Bertrand, 2008. "Climate Change Mitigation Options and Directed Technical Change: A Decentralized Equilibrium Analysis," IDEI Working Papers 510, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
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