“…Meanwhile, energy system engineering studies have come to the conclusion that significant learning effects may exist for renewable energy sources, offering potential prospects for their future competitive use. Along similar lines of thought, Chakravorty et al (1997) portray an optimistic future of rapidly decreasing costs for renewable energy sources, and subsequently a massive transition of the global energy system towards these resources during the 21st century. Notably, Chakravorty et al (1997) argue that such a transition can occur autonomously, so that the problem of the enhanced greenhouse effect could be resolved without the need for explicit climate change policies.…”
Abstract. This paper analyses the optimal timing and macro-economic costs of carbon emission reductions that mitigate the global average atmospheric temperature increase. We use a macro-economic model in which there are two competing energy sources, fossil-fuelled and nonfossil-fuelled. Technological change is represented endogenously through learning curves, and niche markets exist implying positive demand for the relatively expensive non-fossil-fuelled energy source. Under these conditions, with a temperature increase constraint of 2 • C, early abatement is found to be optimal, and, compared to the results of many existing top-down models, the costs of this strategy prove to be low. We perform an extensive sensitivity analysis of our results regarding the uncertainties that dominate various economic and technological modeling parameters. Uncertainties in the learning rate and the elasticity of substitution between the two different energy sources most significantly affect the robustness of our findings.
“…Meanwhile, energy system engineering studies have come to the conclusion that significant learning effects may exist for renewable energy sources, offering potential prospects for their future competitive use. Along similar lines of thought, Chakravorty et al (1997) portray an optimistic future of rapidly decreasing costs for renewable energy sources, and subsequently a massive transition of the global energy system towards these resources during the 21st century. Notably, Chakravorty et al (1997) argue that such a transition can occur autonomously, so that the problem of the enhanced greenhouse effect could be resolved without the need for explicit climate change policies.…”
Abstract. This paper analyses the optimal timing and macro-economic costs of carbon emission reductions that mitigate the global average atmospheric temperature increase. We use a macro-economic model in which there are two competing energy sources, fossil-fuelled and nonfossil-fuelled. Technological change is represented endogenously through learning curves, and niche markets exist implying positive demand for the relatively expensive non-fossil-fuelled energy source. Under these conditions, with a temperature increase constraint of 2 • C, early abatement is found to be optimal, and, compared to the results of many existing top-down models, the costs of this strategy prove to be low. We perform an extensive sensitivity analysis of our results regarding the uncertainties that dominate various economic and technological modeling parameters. Uncertainties in the learning rate and the elasticity of substitution between the two different energy sources most significantly affect the robustness of our findings.
“…This is an optimistic benchmark scenario, compared to many other analyses, but it is not incredible (Chakravorty et al 1997). Consistent with this transition, total reserves of fossil fuels, measured in energy content, which can be exploited under economically profitable conditions amount to about 160 ZJ (Figure 11).…”
Section: Calibration and Methodologymentioning
confidence: 61%
“…One might object that, in practice, energy savings will also constitute an essential part of emission reductions, but for the longer term in which we are mostly interested, to constrain climate change, the substitution between various energy sources is indispensable, since energy is an essential production factor. A shift away from fossil fuel based energy sources towards carbon-free energy sources is unavoidable (Chakravorty et al 1997. And because of this, it is particularly important to study the effect of induced technological change on the relative contribution of various competing technologies used for energy production (Weyant and Olavson 1999).…”
Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We develop an economic model for fossil-fuel and carbon-free energy supply and demand with capital and labor as production factors, and endogenous technological change through learning by research and learning by doing. We use the model to study inter-temporally efficient carbon taxes for climate stabilization targets. Calculations show an inverted U-curve with an initial rise of carbon-taxes that sets in motion the transition from fossil-fuels to carbon-free energy sources, followed by a drop in carbon taxes when the carbon-free energy sources have grown mature.
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“…Yet, each type of Going Full Circle 8 fossil fuel has specific uses: most coal is used to generate electricity, whereas oil is mostly used for transportation (IEA, 2012). This affects the path of extraction both with and without climate policy (Chakravorty and Krulce, 1994;Chakravorty et al, 1997). As a consequence, each type of fuel is subject to different policies.…”
Section: Is There Really Really a Green Paradox?mentioning
Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We argue that the literature on the green paradox has largely ignored the demand side of the resource market, and that this side of the market may mitigate the size of an emissions increase in response to imperfect climate policies. These claims are informed by recent empirical findings. Our arguments lead to clear policy recommendations.
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Documents in EconStor mayJEL-Code: Q310, Q380, Q580.
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