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Optimal Timing of Carbon Capture Policies under Learning-by-doing

Author

Listed:
  • Jean-Pierre Amigues

    (Toulouse School of Economics (INRA and LERNA))

  • Gilles Lafforgue

    (Université de Toulouse, Toulouse Business School)

  • Michel Moreaux

    (Toulouse School of Economics (IDEI and LERNA))

Abstract

Using a standard Hotelling model of resource exploitation, we determine the optimal energy consumption paths from three options: dirty coal, which is non-renewable and carbon-emitting; clean coal, which is also non-renewable but carbon-free thanks to carbon capture and storage (CCS); and solar energy, which is renewable and carbon-free. We assume that the atmospheric carbon stock cannot exceed an exogenously given ceiling. Taking into account learning-by-doing in CCS technology, we show the following results: i) Clean coal exploitation cannot begin before the outset of the carbon constrained phase and must stop strictly before the end of this phase; ii) The energy price path can evolve non-monotonically over time; and iii) When the solar cost is low enough, an unusual energy consumption sequence along which solar energy is interrupted for some time and replaced by clean coal may exist.

Suggested Citation

  • Jean-Pierre Amigues & Gilles Lafforgue & Michel Moreaux, 2015. "Optimal Timing of Carbon Capture Policies under Learning-by-doing," Working Papers 2015.20, FAERE - French Association of Environmental and Resource Economists.
  • Handle: RePEc:fae:wpaper:2015.20
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    References listed on IDEAS

    as
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    Cited by:

    1. Jean-Pierre Amigues & Michel Moreaux, 2019. "Energy Conversion Rate Improvements, Pollution Abatement Efforts and Energy Mix: The Transition toward the Green Economy under a Pollution Stock constraint," Working Papers 2019.14, FAERE - French Association of Environmental and Resource Economists.
    2. Durmaz, Tunç, 2018. "The economics of CCS: Why have CCS technologies not had an international breakthrough?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 95(C), pages 328-340.
    3. Guo, Jian-Xin & Huang, Chen, 2020. "Feasible roadmap for CCS retrofit of coal-based power plants to reduce Chinese carbon emissions by 2050," Applied Energy, Elsevier, vol. 259(C).
    4. Tunç Durmaz & Fred Schroyen, 2020. "Evaluating Carbon Capture And Storage In A Climate Model With Endogenous Technical Change," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 11(01), pages 1-47, February.
    5. Waxman, Andrew R. & Corcoran, Sean & Robison, Andrew & Leibowicz, Benjamin D. & Olmstead, Sheila, 2021. "Leveraging scale economies and policy incentives: Carbon capture, utilization & storage in Gulf clusters," Energy Policy, Elsevier, vol. 156(C).

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    More about this item

    Keywords

    Clean Energy; Food Demand; Land Quality; Renewable Fuel Standards; Transportation;
    All these keywords.

    JEL classification:

    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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