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Optimal capture and sequestration from the carbon emission flow and from the atmospheric carbon stock with heterogeneous energy consuming sectors

Author

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  • Jean Pierre Amigues
  • Gilles Lafforgue
  • Michel Moreaux

Abstract

We characterize the optimal exploitation paths of two primary energy resources. The first one is a non-renewable polluting resource, the second one a pollution-free renewable resource. Both resources can supply the energy needs of two sectors. Sector 1 is able to reduce the potential carbon emissions generated by its non-renewable energy consumption at a reasonable cost while sector 2 cannot. Another possibility is to capture the carbon spread in the atmosphere but at a significantly higher cost. We assume that the atmospheric carbon stock cannot exceed some given ceiling and that this constraint is effective. We show that there may exist paths along which it is optimal to begin by fully capturing the sector 1's potential emission flow before the ceiling constraint begins to be effective. Also there may exist optimal paths along which both capture devices have to be activated, in which case the potential emission flow of sector 1 is firrst fully abated and next the society must resort to the atmospheric carbon reducing device.
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Suggested Citation

  • Jean Pierre Amigues & Gilles Lafforgue & Michel Moreaux, 2010. "Optimal capture and sequestration from the carbon emission flow and from the atmospheric carbon stock with heterogeneous energy consuming sectors," LERNA Working Papers 10.05.311, LERNA, University of Toulouse.
  • Handle: RePEc:ler:wpaper:10.05.311
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    File URL: http://www2.toulouse.inra.fr/lerna/travaux/cahiers2010/10.05.311.pdf
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    References listed on IDEAS

    as
    1. Lafforgue, Gilles & Magné, Bertrand & Moreaux, Michel, 2006. "Optimal Sequestration Policy with a Ceiling on the Stock of Carbon in the Atmosphere," IDEI Working Papers 401, Institut d'Économie Industrielle (IDEI), Toulouse.
    2. Chakravorty, Ujjayant & Magne, Bertrand & Moreaux, Michel, 2006. "A Hotelling model with a ceiling on the stock of pollution," Journal of Economic Dynamics and Control, Elsevier, vol. 30(12), pages 2875-2904, December.
    3. Edmonds, Jae & Clarke, John & Dooley, James & Kim, Son H. & Smith, Steven J., 2004. "Stabilization of CO2 in a B2 world: insights on the roles of carbon capture and disposal, hydrogen, and transportation technologies," Energy Economics, Elsevier, vol. 26(4), pages 517-537, July.
    4. Lafforgue, Gilles & Magné, Bertrand & Moreaux, Michel, 2008. "Energy substitutions, climate change and carbon sinks," Ecological Economics, Elsevier, vol. 67(4), pages 589-597, November.
    5. Reyer Gerlagh & Bob van der Zwaan, 2006. "Options and Instruments for a Deep Cut in CO2 Emissions: Carbon Dioxide Capture or Renewables, Taxes or Subsidies?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 25-48.
    6. repec:adr:anecst:y:2006:i:81:p:06 is not listed on IDEAS
    7. Ujjayant Chakravorty & Bertrand Magne & Michel Moreaux, 2006. "Plafond de concentration en carbone et substitutions entre ressources énergétiques," Annals of Economics and Statistics, GENES, issue 81, pages 141-168.
    8. Chakravorty, Ujjayant & Magné, Bertrand & Moreaux, Michel, 2004. "Plafond de concentration atmosphérique en carbone et substitutions entre ressources énergétiques," IDEI Working Papers 260, Institut d'Économie Industrielle (IDEI), Toulouse.
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    Citations

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    Cited by:

    1. Matthias Kalkuhl & Ottmar Edenhofer & Kai Lessmann, 2015. "The Role of Carbon Capture and Sequestration Policies for Climate Change Mitigation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 60(1), pages 55-80, January.
    2. Renaud Coulomb & Fanny Henriet, 2010. "Carbon price and optimal extraction of a polluting fossil fuel with restricted carbon capture," PSE Working Papers halshs-00564852, HAL.
    3. Moreaux, Michel & Withagen, Cees, 2013. "Climate Change and Carbon Capture and Storage," IDEI Working Papers 774, Institut d'Économie Industrielle (IDEI), Toulouse.
    4. Niko Jaakkola, 2013. "Monopolistic Sequestration of European Carbon Emissions," OxCarre Working Papers 098, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    5. Michael Hoel, 2011. "The Supply Side of CO 2 with Country Heterogeneity," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(4), pages 846-865, December.
    6. Amigues, Jean-Pierre & Moreaux, Michel, 2013. "The atmospheric carbon resilience problem: A theoretical analysis," Resource and Energy Economics, Elsevier, vol. 35(4), pages 618-636.
    7. Renaud Coulomb & Fanny Henriet, 2010. "Carbon price and optimal extraction of a polluting fossil fuel with restricted carbon capture," Working Papers halshs-00564852, HAL.
    8. Moreaux, Michel & Withagen, Cees, 2015. "Optimal abatement of carbon emission flows," Journal of Environmental Economics and Management, Elsevier, vol. 74(C), pages 55-70.

    More about this item

    JEL classification:

    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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