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The value of technology and of its evolution towards a low carbon economy

Author

Listed:
  • Massimo Tavoni

  • Enrica Cian
  • Gunnar Luderer
  • Jan Steckel
  • Henri Waisman

Abstract

This paper assesses the economic value associated with the development of various low-carbon technologies in the context of climate stabilization. We analyze the impact of restrictions on the development of specific mitigation technologies, comparing three integrated assessment models used in the RECIPE comparison exercise. Our results indicate that the diversification of the carbon mitigation portfolio is an important determinant of the feasibility of climate policy. Foregoing specific low carbon technologies raises the cost of achieving the climate policy, though at different rates. CCS and renewables are shown to have the highest value, given their flexibility and wide coverage. The costs associated with technology failure are shown to be related to the role that each technology plays in the stabilization scenario, but also to the expectations about their technological progress. In particular, the costs of restriction of mature technologies can be partly compensated by more innovation and technological advancement. Copyright Springer Science+Business Media B.V. 2012

Suggested Citation

  • Massimo Tavoni & Enrica Cian & Gunnar Luderer & Jan Steckel & Henri Waisman, 2012. "The value of technology and of its evolution towards a low carbon economy," Climatic Change, Springer, vol. 114(1), pages 39-57, September.
    • Handle: RePEc:spr:climat:v:114:y:2012:i:1:p:39-57
    DOI: 10.1007/s10584-011-0294-3
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    References listed on IDEAS

    as
    1. Bosetti, Valentina & Carraro, Carlo & Duval, Romain & Tavoni, Massimo, 2011. "What should we expect from innovation? A model-based assessment of the environmental and mitigation cost implications of climate-related R&D," Energy Economics, Elsevier, vol. 33(6), pages 1313-1320.
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    3. Olivier Sassi & Renaud Crassous & Jean-Charles Hourcade & Vincent Gitz & Henri Waisman & Celine Guivarch, 2010. "IMACLIM-R: a modelling framework to simulate sustainable development pathways," International Journal of Global Environmental Issues, Inderscience Enterprises Ltd, vol. 10(1/2), pages 5-24.
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    5. Nemet, Gregory F. & Kammen, Daniel M., 2007. "U.S. energy research and development: Declining investment, increasing need, and the feasibility of expansion," Energy Policy, Elsevier, vol. 35(1), pages 746-755, January.
    6. Carraro, Carlo & Duval, Romain & Bosetti, Valentina & Tavoni, Massimo, 2010. "What Should we Expect from Innovation? A Model-Based Assessment of the Environmental and Mitigation Cost Implications of Climate-Related R&D," CEPR Discussion Papers 7751, Centre for Economic Policy Research.
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    8. Clarke, Leon & Weyant, John & Edmonds, Jae, 2008. "On the sources of technological change: What do the models assume," Energy Economics, Elsevier, vol. 30(2), pages 409-424, March.
    9. Richels, Richard G. & Blanford, Geoffrey J., 2008. "The value of technological advance in decarbonizing the U.S. economy," Energy Economics, Elsevier, vol. 30(6), pages 2930-2946, November.
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