Climate Change And The Economics Of Targeted Mitigation In Sectors With Long-Lived Capital Stock

Shalizi, Zmarak; Lecocq, Franck

doi:10.1596/1813-9450-5063

Cited by 34 publications

(28 citation statements)

References 15 publications

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“…This result provides an analytical framework to support previous ndings that larger eorts are desirable in sectors with high inertia and large potential (Jaccard and Rivers, 2007;Shalizi and Lecocq, 2009;Vogt-Schilb and Hallegatte, 2011).…”

supporting

confidence: 82%

How Inertia and Limited Potentials Affect the Timing of Sectoral Abatements in Optimal Climate Policy

Vogt-Schilb¹,

Meunier²,

Hallegatte³

2012

Policy Research Working Papers

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This paper investigates the optimal timing of greenhouse gas abatement eorts in a multisectoral model with economic inertia, each sector having a limited abatement potential. It denes economic inertia as the conjunction of technical inertia a social planner chooses investment on persistent abating activities, as opposed to choosing abatement at each time period independently and increasing marginal investment costs in abating activities. It shows that in the presence of economic inertia, optimal abatement eorts (in dollars per ton) are bellshaped and trigger a transition toward a low-carbon economy. The authors prove that optimal marginal abatement costs should dier across sectors: they depend on the global carbon price, but also on sector-specic shadow costs of the sectoral abatement potential. The paper discusses the impact of the convexity of abatement investment costs: more rigid sectors are represented with more convex cost functions and should invest more in early abatement. The conclusion is that overlapping mitigation policies should not be discarded based on the argument that they set dierent marginal costs (dierent carbon prices) in dierent sectors.

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supporting

confidence: 82%

How Inertia and Limited Potentials Affect the Timing of Sectoral Abatements in Optimal Climate Policy

Vogt-Schilb¹,

Meunier²,

Hallegatte³

2012

Policy Research Working Papers

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“…A number of studies show that GHG reduction measures in transport have quite favourable abatement costs but require higher capital intensity than many measures in other sectors [52,67]. While these investments result in considerable economy-wide benefits over the lifetime of a vehicle, they may not create sufficient payback rates for the particular individuals responsible for vehicle purchasing decisions.…”

Section: Split Incentivesmentioning

confidence: 99%

The barriers to low-carbon land-transport and policies to overcome them

Lah

2015

Eur. Transp. Res. Rev.

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Considerable efficiency gains can be made costeffectively to set the transport sector on a sustainable development pathway. They can be achieved through already available technologies and practices, which will not only reduce greenhouse gas emissions significantly, but also generate social, environmental and economic co-benefits. However, progress in the take-up of low-carbon mobility measures substantially lags behind the potential. A number of barriers contribute to this lack of uptake. This paper explores those barriers by focusing on vehicle fuel efficiency in particular, but will also touch on the wider policy framework to improve the efficiency of the transport sector and reduce emissions. The paper suggests that a combination of fuel pricing, differentiated vehicle taxation, vehicle standards and the provision of modal choice are necessary to minimise rebound effects and significantly curb transport sector greenhouse gas emissions at low-or even negative cost.

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“…A carbon lock-in is the result of a specific path dependence favouring fossil-fuel technologies over low-carbon alternatives. Increasing returns to scale by infrastructure provision (e.g., gas pipelines) and agglomeration economics (clustering around the cheapest source of fuel, e.g., in the Ruhr area) are factors fostering path dependence [10]. Sunk investments, or more generally, long-liveability of capital stock create further inertia in the energy system [10,11].…”

Section: Path Dependence and Carbon Lock-in In The Electricity Sectormentioning

confidence: 99%

“…Increasing returns to scale by infrastructure provision (e.g., gas pipelines) and agglomeration economics (clustering around the cheapest source of fuel, e.g., in the Ruhr area) are factors fostering path dependence [10]. Sunk investments, or more generally, long-liveability of capital stock create further inertia in the energy system [10,11]. The key reason for a carbon lock-in is non-responsiveness of markets with respect to inter-temporal externalities: Imperfect foresight, uncertainty on future fuel prices and on post-2020 climate targets and policies produce systematic underinvestment in research and development (R&D) of effective abatement technologies.…”

Section: Path Dependence and Carbon Lock-in In The Electricity Sectormentioning

confidence: 99%

Carbon Lock-Out: Advancing Renewable Energy Policy in Europe

et al. 2012

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As part of its climate strategy, the EU aims at increasing the share of electricity from renewable energy sources (RES-E) in overall electricity generation. Attaining this target poses a considerable challenge as the electricity sector is "locked" into a carbon-intensive system, which hampers the adoption of RES-E technologies. Electricity generation, transmission and distribution grids as well as storage and demand response are subject to important path dependences, which put existing, non-renewable energy sources at an advantage. This paper examines how an EU framework for RES-E support policies should be designed to facilitate a carbon lock-out. For this purpose, we specify the major technological, economic and institutional barriers to RES-E. For each of the barriers, a policy review is carried out which assesses the performance of existing policy instruments and identifies needs for reform. The review reveals several shortcomings: while policies targeting generation are widely in place, measures to address barriers associated with OPEN ACCESSEnergies 2012, 5 324 electricity grids, storage and demand are still in their infancy and have to be extended. Moreover, the implementation of policies has been fragmented across EU Member States. In this respect, national policies should be embedded into an integrated EU-wide planning of the RES-E system with overarching energy scenarios and partially harmonized policy rules.

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Climate Change And The Economics Of Targeted Mitigation In Sectors With Long-Lived Capital Stock

Cited by 34 publications

References 15 publications

How Inertia and Limited Potentials Affect the Timing of Sectoral Abatements in Optimal Climate Policy

How Inertia and Limited Potentials Affect the Timing of Sectoral Abatements in Optimal Climate Policy

The barriers to low-carbon land-transport and policies to overcome them

Carbon Lock-Out: Advancing Renewable Energy Policy in Europe

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