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

Author

Listed:
  • Enrica De Cian

    (Fondazione Eni Enrico Mattei (FEEM) and Euro-Mediterranean Center on Climate Change (CMCC))

  • Samuel Carrara

    (Fondazione Eni Enrico Mattei (FEEM) and Euro-Mediterranean Center on Climate Change (CMCC))

  • Massimo Tavoni

    (Fondazione Eni Enrico Mattei (FEEM) and Euro-Mediterranean Center on Climate Change (CMCC))

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

  • Enrica De Cian & Samuel Carrara & Massimo Tavoni, 2012. "Innovation Benefits from Nuclear Phase-out: Can they Compensate the Costs?," Working Papers 2012.96, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2012.96
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    References listed on IDEAS

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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.

    More about this item

    Keywords

    Technological change; Climate policy; Nuclear phase-out;

    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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