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ITC in a Global Growth-Climate Model with CCS: The Value of Induced Technical Change for Climate Stabilization

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  • Reyer Gerlagh

Abstract

We assess the effect of ITC in a global growth model, - DEMETER-1CCS - with learning-by-doing, where energy savings, energy transition and carbon capturing and sequestration (CCS) are the three main options for emissions reductions. The model accounts for technological change based on learning by doing, embodied in capital installed in previous periods. We run five scenarios: one baseline scenario with no climate change policy and four stabilization scenarios in which atmospheric CO2 concentrations are stabilized at 550, 500, 450, and 400 ppmv. We find that the timing of emissions reductions and the investment strategy is relatively independent of the endogeneity of technological change. More important is the vintages’ structure of production. ITC does reduce costs by approximately a factor of 2, however, these benefits only materialize after some decades.

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  • Reyer Gerlagh, 2006. "ITC in a Global Growth-Climate Model with CCS: The Value of Induced Technical Change for Climate Stabilization," The Energy Journal, , vol. 27(1_suppl), pages 223-240, January.
    • Handle: RePEc:sae:enejou:v:27:y:2006:i:1_suppl:p:223-240
    DOI: 10.5547/ISSN0195-6574-EJ-VolSI2006-NoSI1-11
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    1. Minoru Nakada, 2004. "Does Environmental Policy Necessarily Discourage Growth?," Journal of Economics, Springer, vol. 81(3), pages 249-275, March.
    2. Gerlagh, Reyer & van der Zwaan, Bob, 2003. "Gross world product and consumption in a global warming model with endogenous technological change," Resource and Energy Economics, Elsevier, vol. 25(1), pages 35-57, February.
    3. 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.
    4. 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.
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