When Starting with the Most Expensive Option Makes Sense On Marginal Abatement Cost Curves and Optimal Abatement Pathways
AbstractThis paper investigates the optimal implementation schedule of the measures listed in a Marginal Abatement Cost Curves (MACC). Costs and abating potentials of each measure, provided by a MACC, are completed with a maximum implementation speed. We find that, when coping with a carbon budget, it makes sense to implement some expensive options before exhausting the abating potential of the cheapest options. With abatement targets expressed in terms of emissions at one point in time, e.g.~reducing emissions by 20\% in 2020 and by 75\% in 2050 it can be preferable to start with the most expensive options if their potential is higher and their inertia is great. The best strategy to reach a short-term target depends on whether this target is the ultimate objective or there is a longer-term target. Using just the cheapest options to reach the 2020 target may create a carbon-intensive lock-in and make the 2050 target unreachable. Results suggest that a unique carbon price in all sectors may not be the most efficient approach. Additional sectoral policies, such as the 20\% renewable energy target in Europe, may be part of an efficient mitigation policy.
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 HAL in its series Working Papers with number hal-00626261.
Date of creation: 01 Sep 2011
Date of revision:
Note: View the original document on HAL open archive server: http://hal-enpc.archives-ouvertes.fr/hal-00626261
Contact details of provider:
Web page: http://hal.archives-ouvertes.fr/
optimal timing; inertia; sectoral policies; dynamic efficiency;
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.:
- Kydland, Finn E & Prescott, Edward C, 1982.
"Time to Build and Aggregate Fluctuations,"
Econometric Society, vol. 50(6), pages 1345-70, November.
- Finn E. Kydland & Edward C. Prescott, 1982. "Executable program for "Time to Build and Aggregate Fluctuations"," QM&RBC Codes 4, Quantitative Macroeconomics & Real Business Cycles.
- Finn E. Kydland & Edward C. Prescott, 1982. "Web interface for "Time to Build and Aggregate Fluctuations"," QM&RBC Codes 4a, Quantitative Macroeconomics & Real Business Cycles.
- Jean-Charles Hourcade & Philippe Ambrosi & Stéphane Hallegatte & Franck Lecocq & Patrice Dumas & Minh Ha-Duong, 2003. "Optimal control models and elicitation of attitudes towards climate damages," Post-Print halshs-00000966, HAL.
- Adrien Vogt-Schilb & Guy Meunier & Stéphane Hallegatte, 2012.
"How inertia and limited potentials affect the timing of sectoral abatements in optimal climate policy,"
- Vogt-Schilb, Adrien & Meunier, Guy & Hallegatte, Stephane, 2012. "How inertia and limited potentials affect the timing of sectoral abatements in optimal climate policy," Policy Research Working Paper Series 6154, The World Bank.
- Kalkuhl, Matthias & Edenhofer, Ottmar & Lessmann, Kai, 2012.
"Learning or lock-in: Optimal technology policies to support mitigation,"
Resource and Energy Economics,
Elsevier, vol. 34(1), pages 1-23.
- Matthias Kalkuhl & Ottmar Edenhofer & Kai Lessmann, 2011. "Learning or Lock-in: Optimal Technology Policies to Support Mitigation," CESifo Working Paper Series 3422, CESifo Group Munich.
- Fischer, Carolyn & Preonas, Louis, 2010.
"Combining Policies for Renewable Energy: Is the Whole Less than the Sum of Its Parts?,"
dp-10-19, Resources For the Future.
- Fischer, Carolyn & Preonas, Louis, 2010. "Combining Policies for Renewable Energy: Is the Whole Less Than the Sum of Its Parts?," International Review of Environmental and Resource Economics, now publishers, vol. 4(1), pages 51-92, June.
- Franck Lecocq & Jean-Charles Hourcade & Minh Ha-Duong, 1998.
"Decision making under uncertainty and inertia constraints: sectoral implications of the when flexibility,"
- 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.
- Jackson, Tim, 1991. "Least-cost greenhouse planning supply curves for global warming abatement," Energy Policy, Elsevier, vol. 19(1), pages 35-46.
- Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-91, June.
- Céline Guivarch & Stephane Hallegatte, 2011.
"Existing Infrastructure and the 2°C Target,"
- Klepper, Gernot & Peterson, Sonja, 2006.
"Marginal abatement cost curves in general equilibrium: The influence of world energy prices,"
Open Access Publications from Kiel Institute for the World Economy
3775, Kiel Institute for the World Economy (IfW).
- Klepper, Gernot & Peterson, Sonja, 2006. "Marginal abatement cost curves in general equilibrium: The influence of world energy prices," Resource and Energy Economics, Elsevier, vol. 28(1), pages 1-23, January.
- Gernot Klepper & Sonja Peterson, 2004. "Marginal Abatement Cost Curves in General Equilibrium: The Influence of World Energy Prices," Working Papers 2004.136, Fondazione Eni Enrico Mattei.
- 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.
- Christoph Böhringer & Knut Rosendahl, 2010. "Green promotes the dirtiest: on the interaction between black and green quotas in energy markets," Journal of Regulatory Economics, Springer, vol. 37(3), pages 316-325, June.
- Steven E. Stoft, 1995. "The Economics of Conserved-Energy "Supply" Curves," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 109-137.
- Francois Gusdorf & Stephane Hallegatte & Alain Lahellec, 2007. "Time and space matter: how urban transitions create inequality," Working Papers hal-00522404, HAL.
- 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.
- Avinash Dixit & Luisa Lambertini, 2003.
"Interactions of Commitment and Discretion in Monetary and Fiscal Policies,"
American Economic Review,
American Economic Association, vol. 93(5), pages 1522-1542, December.
- Avinash Dixit & Luisa Lambertini, 2003. "Interactions of Commitment and Discretion in Monetary and Fiscal Policies," Boston College Working Papers in Economics 575, Boston College Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD).
If references are entirely missing, you can add them using this form.