Carbon Emissions Caps and the Impact of a Radical Change in Nuclear Electricity Costs
In this study we analyze the impact of a radical change in nuclear electricity costs on the optimal electricity generation technology mix (EGTM) and constrain the value of information (VOI) on future nuclear costs. We consider three nuclear cost events and four carbon emissions caps. We develop a two-stage framework for energy-economic model MARKAL to eliminate foresight of future nuclear cost movements. We examine how the EGTM responds to these movements under alternative caps and analyze how these movements affect the cost of each cap. We define the expected savings from perfect foresight (ESPF), an upper bound on the VOI. We found that with current technologies, carbon mitigation that does not rely heavily on nuclear electricity is economically insensible. The Strong Cap is extremely costly because it restricts flexibility to respond to cost signals in choosing among technologies. The ESPF is highest under the Medium Cap by a substantial margin.
Volume (Year): 3 (2013)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://www.econjournals.com|
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.:
- Bosetti, Valentina & Tavoni, Massimo, 2009.
"Uncertain R&D, backstop technology and GHGs stabilization,"
Elsevier, vol. 31(Supplemen), pages 18-26.
- Valentina Bosetti & Massimo Tavoni, 2007. "Uncertain R&D, Backstop Technology and GHGs Stabilization," Working Papers 2007.6, Fondazione Eni Enrico Mattei.
- 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.
- Keppo, Ilkka & Strubegger, Manfred, 2010. "Short term decisions for long term problems – The effect of foresight on model based energy systems analysis," Energy, Elsevier, vol. 35(5), pages 2033-2042.
- Gillingham, Kenneth T. & Newell, Richard G. & Pizer, William A., 2007.
"Modeling Endogenous Technological Change for Climate Policy Analysis,"
dp-07-14, Resources For the Future.
- Gillingham, Kenneth & Newell, Richard G. & Pizer, William A., 2008. "Modeling endogenous technological change for climate policy analysis," Energy Economics, Elsevier, vol. 30(6), pages 2734-2753, November.
- Goulder, Lawrence H. & Schneider, Stephen H., 1999. "Induced technological change and the attractiveness of CO2 abatement policies," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 211-253, August.
- Babiker, Mustafa & Gurgel, Angelo & Paltsev, Sergey & Reilly, John, 2009. "Forward-looking versus recursive-dynamic modeling in climate policy analysis: A comparison," Economic Modelling, Elsevier, vol. 26(6), pages 1341-1354, November.
- Hu, Ming-Che & Hobbs, Benjamin F., 2010. "Analysis of multi-pollutant policies for the U.S. power sector under technology and policy uncertainty using MARKAL," Energy, Elsevier, vol. 35(12), pages 5430-5442.
- Mark K. Jaccard & John Nyboer & Crhis Bataille & Bryn Sadownik, 2003. "Modeling the Cost of Climate Policy: Distinguishing Between Alternative Cost Definitions and Long-Run Cost Dynamics," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 49-73.
When requesting a correction, please mention this item's handle: RePEc:eco:journ2:2013-01-7. 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: (Ilhan Ozturk)
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.