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Learning by Doing with Constrained Growth Rates:An Application to Energy Technology Policy

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  • Karsten Neuhoff

Abstract

Learning by doing methodology attributes cost reductions of a technology to cumulative investment and experience. This paper argues that in addition market growth rates must also be considered. Historically growth rates have been limited in most sectors, thus allowing for feedback in the learning process. When market growth is below the ÔoptimalÕ rate, the marginal value of additional investment could be a multiple of the direct learning benefit. Analytic and numeric models quantify this impact Ð emphasizing the need for tailored technology policy in addition to carbon pricing. Implications for the modeling of endogenous technological change are discussed.

Suggested Citation

  • Karsten Neuhoff, 2008. "Learning by Doing with Constrained Growth Rates:An Application to Energy Technology Policy," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 165-182.
  • Handle: RePEc:aen:journl:dn-se-a09
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    Cited by:

    1. Felix Groba & Barbara Breitschopf, 2013. "Impact of Renewable Energy Policy and Use on Innovation: A Literature Review," Discussion Papers of DIW Berlin 1318, DIW Berlin, German Institute for Economic Research.
    2. Wand, Robert & Leuthold, Florian, 2011. "Feed-in tariffs for photovoltaics: Learning by doing in Germany?," Applied Energy, Elsevier, pages 4387-4399.
    3. Rai, Varun & Victor, David G. & Thurber, Mark C., 2010. "Carbon capture and storage at scale: Lessons from the growth of analogous energy technologies," Energy Policy, Elsevier, vol. 38(8), pages 4089-4098, August.
    4. Lehmann, Paul, 2013. "Supplementing an emissions tax by a feed-in tariff for renewable electricity to address learning spillovers," Energy Policy, Elsevier, vol. 61(C), pages 635-641.
    5. Green, Richard & Léautier, Thomas-Olivier, 2015. "Do costs fall faster than revenues? Dynamics of renewables entry into electricity markets," TSE Working Papers 15-591, Toulouse School of Economics (TSE).

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    • F0 - International Economics - - General

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