Innovation Benefits from Nuclear Phase-out: Can they Compensate the Costs?
AbstractThis paper investigates whether an inefficient allocation of abatement, due to constraints on the use of currently available low carbon mitigation options, can promote innovation in new technologies and eventually generate welfare gains. We focus on the case of nuclear power phase out, when accounting for endogenous technical change in energy efficiency and in low carbon technologies. The analysis uses the Integrated Assessment Model WITCH, which features multiple externalities due to both climate and innovation market failures. Our results show that phasing out nuclear power stimulates additional R&D investments and deployment of infant technologies with large learning potential. The innovation benefits which this would generate and that would not otherwise be captured due to intertemporal and international externalities almost completely offset the economic costs of phasing out nuclear power. The technological change benefit depends on the stringency of the climate policy and is distributed unevenly across countries.
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Bibliographic InfoPaper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2012.96.
Date of creation: Dec 2012
Date of revision:
Technological change; Climate policy; Nuclear phase-out;
Find related papers by JEL classification:
- H40 - Public Economics - - Publicly Provided Goods - - - General
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
- Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-02-08 (All new papers)
- NEP-ENE-2013-02-08 (Energy Economics)
- NEP-ENV-2013-02-08 (Environmental Economics)
- NEP-INO-2013-02-08 (Innovation)
- NEP-KNM-2013-02-08 (Knowledge Management & Knowledge Economy)
- NEP-REG-2013-02-08 (Regulation)
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