Economic benefits of decarbonising the global electricity sector
AbstractConventional economic analyses of stringent climate change mitigation have generally concluded that economic austerity would result from carbon austerity. These analyses however rely critically on the assumption of an economic equilibrium, which dismisses established notions on behavioural heterogeneity, path dependence and technology transitions. Here we show that on the contrary, the decarbonisation of the electricity sector globally can lead to improvements in economic performance. By modelling the process of innovation-diffusion and non-equilibrium dynamics, we establish how climate policy instruments for emissions reductions alter economic activity through energy prices, government spending, enhanced investment and tax revenues. While higher electricity prices reduce income and output, this is over-compensated by enhanced employment generated by investments in new technology. We stress that the current dialogue on the impacts of climate policies must be revisited to reflect the real complex dynamics involved in the global economy, not captured by conventional models.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by arXiv.org in its series Papers with number 1310.4403.
Date of creation: Oct 2013
Date of revision:
Contact details of provider:
Web page: http://arxiv.org/
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-25 (All new papers)
- NEP-ENE-2013-10-25 (Energy Economics)
- NEP-ENV-2013-10-25 (Environmental Economics)
- NEP-REG-2013-10-25 (Regulation)
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (arXiv administrators).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.