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Defining the Abatement Cost in Presence of Learning-by-Doing: Application to the Fuel Cell Electric Vehicle

Author

Listed:
  • Anna Creti

    (Ecole Polytechnique, Université Paris-Saclay)

  • Alena Kotelnikova

    (Ecole Polytechnique, Université Paris-Saclay)

  • Guy Meunier

    () (Ecole Polytechnique, Université Paris-Saclay
    INRA-UR1303 ALISS)

  • Jean-Pierre Ponssard

    (Ecole Polytechnique, Université Paris-Saclay
    Université Paris-Saclay)

Abstract

We consider a partial equilibrium model to study the optimal phasing out of polluting goods by green goods. The unit production cost of the green goods involves convexity and learning-by-doing. The total cost for the social planner includes the private cost of production and the social cost of carbon, assumed to be exogenous and growing at the social discount rate. Under these assumptions the optimization problem can be decomposed in two questions: (i) when to launch a given schedule; (ii) at which rate the transition should be completed that is, the design of a transition schedule as such. The first question can be solved using a simple indicator interpreted as the MAC of the whole schedule, possibly non optimal. The case of hydrogen vehicle (Fuel Cell Electric Vehicles) offers an illustration of our results. Using data from the German market we show that the 2015–2050 trajectory foreseen by the industry would be consistent with a carbon price at 52€/t. The transition cost to achieve a 7.5 M car park in 2050 is estimated at 21.6 billion € that is, to JEl 4% discount rate, 115 € annually for each vehicle which would abate 2.18 tCO $$_2$$ 2 per year.

Suggested Citation

  • Anna Creti & Alena Kotelnikova & Guy Meunier & Jean-Pierre Ponssard, 2018. "Defining the Abatement Cost in Presence of Learning-by-Doing: Application to the Fuel Cell Electric Vehicle," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(3), pages 777-800, November.
  • Handle: RePEc:kap:enreec:v:71:y:2018:i:3:d:10.1007_s10640-017-0183-y
    DOI: 10.1007/s10640-017-0183-y
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    References listed on IDEAS

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    Cited by:

    1. Stephen P. Holland & Erin T. Mansur & Andrew J. Yates, 2020. "The Electric Vehicle Transition and the Economics of Banning Gasoline Vehicles," NBER Working Papers 26804, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Dynamic abatement costs; Learning by doing; Fuel cell electric vehicles;

    JEL classification:

    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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