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On the Optimal Timing of Reductions of CO2 Emissions

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Henri de Groot ()

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Abstract

Reducing the emission of greenhouse gases to reduce climate change is high on the policy agenda. Discounted costs of reduction are estimated to be substantial. They depend on the employment of various flexibility mechanisms that affect these costs. One of these flexibility mechanisms is the so-called when-flexibility stressing the timing of policy measures aimed at reducing CO2-emissions. This paper surveys the arguments in favour of early and late reduction. By means of an illustration of some of the key mechanisms, we discuss an applied analysis of optimal timing performed with the applied general equilibrium model DICE.

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Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Papers with number 1.

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Handle: RePEc:cpb:discus:1

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Keywords: emission CO2 reduction timing climate DICE applied general equilibrium model AGE

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Find related papers by JEL classification:
Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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  1. Buonanno, Paolo & Carraro, Carlo & Galeotti, Marzio, 2003. "Endogenous induced technical change and the costs of Kyoto," Resource and Energy Economics, Elsevier, vol. 25(1), pages 11-34, February. [Downloadable!] (restricted)
  2. Bovenberg, A.L. & Smulders, S., 1993. "Environmental Quality and Pollution-Saving Technological Change in Two- Sector Endogenous Growth Model," Papers 9321, Tilburg - Center for Economic Research.
  3. Canton, E.J.F. & Groot, H.L.F. de & Nahuis, R., 1999. "Vested interest and resistance to technology adoption," Discussion Paper 106, Tilburg University, Center for Economic Research. [Downloadable!]
  4. Lans Bovenberg, A. & Smulders, Sjak, 1995. "Environmental quality and pollution-augmenting technological change in a two-sector endogenous growth model," Journal of Public Economics, Elsevier, vol. 57(3), pages 369-391, July. [Downloadable!] (restricted)
  5. Arrow, Kenneth J & Fisher, Anthony C, 1974. "Environmental Preservation, Uncertainty, and Irreversibility," The Quarterly Journal of Economics, MIT Press, vol. 88(2), pages 312-19, May. [Downloadable!] (restricted)
  6. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-51, March. [Downloadable!] (restricted)
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  1. Machiel van Dijk & Richard Nahuis & Daniel Waagmeester, 2005. "Does Public Service Broadcasting Serve The Public? The Future Of Television In The Changing Media Landscape," Working Papers 05-13, Utrecht School of Economics. [Downloadable!]
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