Optimal CO2-abatement with socio-economic inertia and induced technological change
AbstractThe impact of induced technological change (ITC) in energy/climate models on the timing of optimal CO2-abatement depends on whether R&D or learning-by-doing (LBD) is the driving force. Bottom-up energy system models employing LBD suggest strong increases in optimal early abatement. In this paper we extend an existing top-down model supporting this view according to the notion that socio-economic inertia interferes with rapid technological change. We derive analytical results concerning the impact of inertia and ITC on optimal initial abatement and show a wide range of numerical simulations to illustrate magnitudes. Inertia now dominates the timing decision on early abatement, such that LBD might even have a negative effect on early abatement and the impact of R&D is limited. However, ITC still reduces costs of stabilizing atmospheric CO2-concentrations considerably.
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Bibliographic InfoPaper provided by Research unit Sustainability and Global Change, Hamburg University in its series Working Papers with number FNU-37.
Length: 54 pages
Date of creation: Jan 2004
Date of revision: Jan 2004
Publication status: Published, Energy Journal, 27 (4), 25-60
climate policy; technological change; inertia;
Other versions of this item:
- Malte Schwoon & Richard S.J. Tol, 2006. "Optimal CO2-abatement with Socio-economic Inertia and Induced Technological Change," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 25-60.
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
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