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on Resource Economics |
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Issue of 2013‒09‒13
six papers chosen by |
| By: | Zon, Adriaan van (UNU-MERIT/MGSoG, and Maastricht University); David, Paul (SIEPR, and Economics Department, Standford University, and UNU-MERIT/MGSoG) |
| Abstract: | The research reported here gives priority to understanding the inter-temporal resource allocation requirements of a program of technological changes that could halt global warming by completing the transition to a "green" (zero net CO2-emission) production regime within the possibly brief finite interval that remains before Earth's climate is driven beyond a catastrophic tipping point. This paper formulates a multi-phase, just-in-time transition model incorporating carbon-based and carbon-free technical options requiring physical embodiment in durable production facilities, and having performance attributes that are amenable to enhancement by directed R&D expenditures. Transition paths that indicate the best ordering and durations of the phases in which intangible and tangible capital formation is taking place, and capital stocks of different types are being utilized in production, or scrapped when replaced types embodying socially more efficient technologies, are obtained from optimizing solutions for each of a trio of related models that couple the global macro-economy's dynamics with the dynamics of the climate system. They describe the flows of consumption, CO2 emissions and the changing atmospheric concentration of green-house gas (which drives global warming), along with the investment dynamics required for the timely transformation of the production regime. These paths are found as the welfare-optimizing solutions of three different "stacked Hamiltonians", each corresponding to one of our trio of integrated endogenous growth models that have been calibrated comparably to emulate the basic global setting for the "transition planning" framework of dynamic integrated requirements analysis modeling (DIRAM). As the paper's introductory section explains, this framework is proposed in preference to the (IAM) approach that environmental and energy economists have made familiar in integrated assessment models of climate policies that would rely on fiscal and regulatory instruments -- but eschew any analysis of the essential technological transformations that would be required for those policies to have the intended effect. Simulation exercises with our models explore the optimized transition paths' sensitivity to parameter variations, including alternative exogenous specifications of the location of a pair of successive climate "tipping points": the first of these initiates higher expected rates of damage to productive capacity by extreme weather events driven by the rising temperature of the Earth's surface; whereas the second, far more serious "climate catastrophe" tipping point occurs at a still higher temperature (corresponding to a higher atmospheric concentration of CO2). In effect, that sets the point before which the transition to a carbon-free global production regime must have been completed in order to secure the possibility of future sustainable development and continued global economic growth. |
| Keywords: | global warming, tipping point, catastrophic climate instability, extreme weatherrelated damages, R&D, directed technical change, capital-embodied technologies, optimal sequencing, multi-phase optimal control, sustainable endogenous growth |
| JEL: | Q54 Q55 O31 O32 O33 O41 O44 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2013041&r=res |
| By: | Mads, Greaker (Statistics Norway); Kristoffer, Midttømme (Dept. of Economics, University of Oslo) |
| Abstract: | Network externalities could be present for many low or zero emission technologies. One obvious example is alternative fuel cars, whose use value depends on the network of service stations. The literature has only briefy looked at environmentally benefcial technologies. Yet, the general literature on network effects is mixed on whether governments need to intervene in order to correct for network externalities. In this paper we study implications of network effects on environmental policy in a discrete time dynamic game. Firms sell a durable good. One type of durable is causing pollution when being used, while the other type is "clean". Consumers' utility increase in the number of other users of the same type of durable, which gives rise to the network effect. We find that the optimal tax depends on the size of the clean network. If starting from a situation in which the dirty network dominates, the optimal tax may exceed the marginal environmental damage, thereby charging consumers for more than just their own emissions. Applying a Pigovian tax may, on the contrary, fail to introduce a socially beneficial clean network. |
| Keywords: | Network eects; lock-in; enviromnetal taxes |
| JEL: | H23 Q55 Q58 |
| Date: | 2013–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2013_015&r=res |
| By: | Felix Groba; Barbara Breitschopf |
| Abstract: | Technological changes in renewable energy technologies play an important role in the context of climate change as they contribute to a reduction of technology costs and lead to an increasing market penetration of emission reducing technologies. This paper provides a comprehensive literature review highlighting numerous motivations and necessities underlying the introduction of renewable energy policies. Starting with a brief overview on the induced innovation hypothesis, we show that policy intervention has been an effective tool to change relative prices, thus, incentivizing innovation, but that also various influencing factors are at play. We show that the literature agrees on the need for specific renewable energy policies in order to overcome concomitant market failures and barrier. We highlight that technology specific policies are generally understood as necessary complements to environmental non-technology specific policies in order to generate <br /> <br /> adequate demand in energy markets. However, in that respect, we outline the ongoing debate on the effectiveness of different technology specific policies on the demand-pull side and the role of technology-push policies. Additionally we provide a summary on methodological approaches to measure policy efforts and technological change respecting different impact levels and stages within the technological change process. Finally, by focusing on international competitiveness and technology cost we highlight two aspects of the effects renewable technology innovation and respective policy support. |
| JEL: | N70 O31 O32 O57 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1318&r=res |
| By: | Durmaz, Tunç (Dept. of Economics, Norwegian School of Economics and Business Administration); Schroyen, Fred (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | Carbon capture and storage (CCS) is considered a critical technology needed to curb CO2 emissions and is envisioned by the International Energy Agency (IEA) as an integral part of least-cost greenhouse gas mitigation policy. In this paper, we assess the extent to which CCS and R&D in CCS technology are indeed part of a socially efficient solution to the problem of climate change. For this purpose, we extend the intertemporal model of climate and directed technical change developed by Acemoglu et al. (2012, American Economic Review, 102(1): 131{66) to include a sector responsible for CCS. Surprisingly, even for an optimistic cost estimate available for CCS ($60/ton of CO2 avoided), we find that it is not optimal to deploy CCS or devote resources to R&D in CCS technology either in the near or distant future. Indeed, it is only when the marginal cost of CCS is less than $12/ton that a scenario with an active CCS sector (including R&D) becomes optimal, though not in the near future. |
| Keywords: | Carbon capture and storage CCS; climate. |
| JEL: | H23 O31 Q43 Q54 Q55 |
| Date: | 2013–08–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2013_014&r=res |
| By: | Essam Yassin Mohammed; Shannon Wang; Gary Kawaguchi |
| Abstract: | Developing countries have collectively displayed relatively high growth rates in the last decade. Although large disparities still persist in standards of living, low and middle income countries averaged economic growth of 6.2% between 2000 and 2008, pulling 325 million people out of poverty (World Bank, 2010). Global growth has been accompanied by environmental degradation and in some cases there are growing numbers of people still living in poverty. Key questions for development planning today in countries include: Can developing countries strike a balance between economic growth, societal well-being and environmental protection? Can inclusive, green growth be a way forward? This report presents a case study on Cambodia designed to answer these questions. The case study draws on several sources of information to compile a “snapshot” of the situation today. In particular, qualitative information was gathered through a two-day, multi-stakeholder workshop and through bilateral interviews conducted with relevant actors from both public and private sectors. It also draws on relevant literature to present a balanced picture of the state of play on green growth in Cambodia. |
| Date: | 2013–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envddd:2013/8-en&r=res |
| By: | Francesco Vona (Ofce sciences-po, Skema Business School); Francesco Nicolli (Ceris/Cnr, University of Ferrara) |
| Abstract: | We analyse the impact of market liberalisation on renewable energy policies in OECD countries. To this end, we first develop an aggregated indicator of renewable energy policies using principal components analysis and then examine its determinants through panel data techniques. Our results are consistent with the predictions of political-economy models of environmental policies, as brown lobbying, proxied by entry barriers in the energy sector, and citizens preferences have the expected effects on policy. Brown lobbying has a negative effect on the policy indicator, even when accounting for endogeneity in its effects in a dynamic panel specification and using different policy indicators.Reducing income inequality,the ratification of the Kyoto protocol and stronger green parties all positively affect the approval of more ambitious policies but with less robust results. |
| Keywords: | Renewable energy policy,Energy market liberalisation,Political economy. |
| JEL: | Q42 Q48 D72 O38 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1310&r=res |