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Innovation Benefits from Nuclear Phase-out: Can they Compensate the Costs?

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  • De Cian, Enrica
  • Carrara, Samuel
  • Tavoni, Massimo

Abstract

This paper investigates whether an inefficient allocation of abatement, due to constraints on the use of currently available low carbon mitigation options, can promote innovation in new technologies and eventually generate welfare gains. We focus on the case of nuclear power phase out, when accounting for endogenous technical change in energy efficiency and in low carbon technologies. The analysis uses the Integrated Assessment Model WITCH, which features multiple externalities due to both climate and innovation market failures. Our results show that phasing out nuclear power stimulates additional R&D investments and deployment of infant technologies with large learning potential. The innovation benefits which this would generate and that would not otherwise be captured due to intertemporal and international externalities almost completely offset the economic costs of phasing out nuclear power. The technological change benefit depends on the stringency of the climate policy and is distributed unevenly across countries.

Suggested Citation

  • De Cian, Enrica & Carrara, Samuel & Tavoni, Massimo, 2012. "Innovation Benefits from Nuclear Phase-out: Can they Compensate the Costs?," Climate Change and Sustainable Development 143126, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemcl:143126
    DOI: 10.22004/ag.econ.143126
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    Cited by:

    1. Kosugi, Takanobu, 2016. "Endogenizing the probability of nuclear exit in an optimal power-generation mix model," Energy, Elsevier, vol. 100(C), pages 102-114.
    2. Zhu, Zhishuang & Liao, Hua & Liu, Li, 2021. "The role of public energy R&D in energy conservation and transition: Experiences from IEA countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 143(C).
    3. Valentina Bosetti & Enrica De Cian, 2013. "A Good Opening: The Key to Make the Most of Unilateral Climate Action," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(2), pages 255-276, October.
    4. Carrara, Samuel, 2020. "Reactor ageing and phase-out policies: global and regional prospects for nuclear power generation," Energy Policy, Elsevier, vol. 147(C).

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    More about this item

    Keywords

    Research and Development/Tech Change/Emerging Technologies;

    JEL classification:

    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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