Advanced Search
MyIDEAS: Login to save this paper or follow this series

How inertia and limited potentials affect the timing of sectoral abatements in optimal climate policy

Contents:

Author Info

  • Adrien Vogt-Schilb

    ()
    (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD : UMR56 - CNRS : UMR8568 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - AgroParisTech)

  • Guy Meunier

    ()
    (ALISS - Alimentation et sciences sociales - INRA : UR1303)

  • Stéphane Hallegatte

    ()
    (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD : UMR56 - CNRS : UMR8568 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - AgroParisTech, CNRM-GAME - Groupe d'étude de l'atmosphère météorologique - CNRS : URA1357 - INSU - Météo France)

Abstract

This paper investigates the optimal timing of greenhouse gas abatement efforts in a multi-sectoral model with economic inertia, each sector having a limited abatement potential. It defines economic inertia as the conjunction of technical inertia --- a social planner chooses investment on persistent abating activities, as opposed to choosing abatement at each time period independently --- and increasing marginal investment costs in abating activities. It shows that in the presence of economic inertia, optimal abatement efforts (in dollars per ton) are bell-shaped and trigger a transition toward a low-carbon economy. The authors prove that optimal marginal abatement costs should differ across sectors: they depend on the global carbon price, but also on sector-specific shadow costs of the sectoral abatement potential. The paper discusses the impact of the convexity of abatement investment costs: more rigid sectors are represented with more convex cost functions and should invest more in early abatement. The conclusion is that overlapping mitigation policies should not be discarded based on the argument that they set different marginal costs (''different carbon prices'') in different sectors.

Download Info

If 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.
File URL: http://hal-enpc.archives-ouvertes.fr/docs/00/72/60/20/PDF/inertia_limited_potentials.pdf
Download Restriction: no

Bibliographic Info

Paper provided by HAL in its series Post-Print with number hal-00722574.

as in new window
Length:
Date of creation: 01 Aug 2012
Date of revision:
Publication status: Published, World Bank Policy Research, 2012, 6154
Handle: RePEc:hal:journl:hal-00722574

Note: View the original document on HAL open archive server: http://hal-enpc.archives-ouvertes.fr/hal-00722574
Contact details of provider:
Web page: http://hal.archives-ouvertes.fr/

Related research

Keywords: climate change mitigation; sectoral policies; optimal policies; optimal timing; inertia; when-flexibility; how-flexibility; overlapping policies;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

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.:
as in new window
  1. GRIMAUD Andre & LAFFORGUE Gilles & MAGNE Bertrand, 2009. "Climate change mitigation options and directed technical change: A decentralized equilibrium analysis," LERNA Working Papers 09.20.296, LERNA, University of Toulouse.
  2. Jaccard, Mark & Rivers, Nic, 2007. "Heterogeneous capital stocks and the optimal timing for CO2 abatement," Resource and Energy Economics, Elsevier, vol. 29(1), pages 1-16, January.
  3. Malte Schwoon & Richard S.J. Tol, 2004. "Optimal CO2-abatement with socio-economic inertia and induced technological change," Working Papers FNU-37, Research unit Sustainability and Global Change, Hamburg University, revised Jan 2004.
  4. Weitzman, Martin L, 1974. "Prices vs. Quantities," Review of Economic Studies, Wiley Blackwell, vol. 41(4), pages 477-91, October.
  5. Daron Acemoglu & Philippe Aghion & Leonardo Bursztyn & David Hemous, 2010. "The Environment and Directed Technical Change," Working Papers 2010.93, Fondazione Eni Enrico Mattei.
  6. Lecocq, Franck & Hourcade, Jean-Charles & Ha Duong, Minh, 1998. "Decision making under uncertainty and inertia constraints: sectoral implications of the when flexibility," Energy Economics, Elsevier, vol. 20(5-6), pages 539-555, December.
  7. Fischer, Carolyn & Preonas, Louis, 2010. "Combining Policies for Renewable Energy: Is the Whole Less than the Sum of Its Parts?," Discussion Papers dp-10-19, Resources For the Future.
  8. Céline Guivarch & Stéphane Hallegatte, 2011. "Existing infrastructure and the 2°C target," Climatic Change, Springer, vol. 109(3), pages 801-805, December.
  9. Shalizi, Zmarak & Lecocq, Franck, 2009. "Climate change and the economics of targeted mitigation in sectors with long-lived capital stock," Policy Research Working Paper Series 5063, The World Bank.
  10. van der Zwaan, B. C. C. & Gerlagh, R. & G. & Klaassen & Schrattenholzer, L., 2002. "Endogenous technological change in climate change modelling," Energy Economics, Elsevier, vol. 24(1), pages 1-19, January.
  11. Vogt-Schilb, Adrien & Hallegatte, Stephane, 2011. "When starting with the most expensive option makes sense : use and misuse of marginal abatement cost curves," Policy Research Working Paper Series 5803, The World Bank.
  12. Vincent Viguie & Stephane Hallegatte, 2012. "Trade-offs and synergies in urban climate policies," Post-Print hal-00716121, HAL.
  13. Goulder, Lawrence H. & Mathai, Koshy, 2000. "Optimal CO2 Abatement in the Presence of Induced Technological Change," Journal of Environmental Economics and Management, Elsevier, vol. 39(1), pages 1-38, January.
  14. Gerlagh, R. & Kverndokk, S. & Rosendahl, K.E., 2009. "Optimal timing of climate change policy: Interaction between carbon taxes and innovation externalities," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3777015, Tilburg University.
  15. Braathen, Nils Axel, 2007. "Instrument Mixes for Environmental Policy: How Many Stones Should be Used to Kill a Bird?," International Review of Environmental and Resource Economics, now publishers, vol. 1(2), pages 185-235, May.
  16. Nordhaus, William D., 1993. "Rolling the 'DICE': an optimal transition path for controlling greenhouse gases," Resource and Energy Economics, Elsevier, vol. 15(1), pages 27-50, March.
  17. Strand, Jon, 2010. "Inertia in infrastructure development : some analytical aspects, and reasons for inefficient infrastructure choices," Policy Research Working Paper Series 5295, The World Bank.
  18. Grubler, Arnulf & Messner, Sabine, 1998. "Technological change and the timing of mitigation measures," Energy Economics, Elsevier, vol. 20(5-6), pages 495-512, December.
  19. Stavins, Robert & Jaffe, Adam & Newell, Richard, 2004. "A Tale of Two Market Failures: Technology and Environmental Policy," Discussion Papers dp-04-38, Resources For the Future.
  20. repec:hal:journl:hal-00626261 is not listed on IDEAS
  21. Fischer, Carolyn & Newell, Richard, 2004. "Environmental and Technology Policies for Climate Mitigation," Discussion Papers dp-04-05, Resources For the Future.
  22. Minh Ha-Duong & Michael Grubb & Jean-Charles Hourcade, 1997. "Influence of socioeconomic inertia and uncertainty on optimal CO2-emission abatement," Post-Print halshs-00002452, HAL.
  23. Michael Grubb & Chapuis Thierry & Minh Ha-Duong, 1995. "The economics of changing course: implications of adaptability and inertia for optimal climate policy," Post-Print halshs-00002455, HAL.
  24. Manne, Alan & Richels, Richard, 2004. "The impact of learning-by-doing on the timing and costs of CO2 abatement," Energy Economics, Elsevier, vol. 26(4), pages 603-619, July.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-00722574. See general 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: (CCSD).

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.