Optimal transition to renewable energy with threshold of irreversible pollution

Bonneuil, Noël; Boucekkine, Raouf

doi:10.1016/j.ejor.2015.05.060

Cited by 29 publications

(18 citation statements)

References 26 publications

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“…However, they do not analyze the determinants of a possible fall in final production or consumption during the transition (albeit some figures of their articles show that such a negative output adjustment may occur in the absence of technical progress). Nor is this issue dealt with in Tsur and Zemel [22], Amigues et al [23] or in Bonneuil and Boucekkine [24]. Reference [22] characterizes the dynamics of an optimal growth model with R&D investments which reduce the cost of using backstop technologies.…”

Section: Literature Reviewmentioning

confidence: 99%

Can the Energy Transition Be Smooth? A General Equilibrium Approach to the EROEI

2020

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The concept of energy return (EROEI ratio) is widely used in energy science to describe the interactions between energy and the economic system but it is largely ignored in macroeconomics. In order to contribute to bridging a gap between these fields of research, we incorporate these metrics into an endogenous growth model with two sectors (energy and final goods) and use this model to analyze the macroeconomic implications of a transition to lower EROEI resources. An approach in terms of net energy allows us (1) to explicitly link the EROEI to macroeconomic variables, (2) to show how it is related to the growth rate of GDP and (3) to obtain a closed-form solution for its long-run value at a general equilibrium level. There is furthermore a tight and decreasing long-run relationship between the EROEI value and the share of investment that must be allocated to the energy sector. Hence, a transition to lower EROEI resources intensifies the rival use of capital in the energy and non-energy sectors and leads to major economic changes, both in the inter-sectoral capital allocation and in the allocation of final output between consumption and investment. We show that a protracted economic contraction may occur before the completion of the transition to renewable energy. We analyze how (1) the magnitude of this contraction and (2) the possibility of an ulterior recovery depend on the initial stock of non-renewables, the potentials of technical progress in the energy and non-energy sectors and the substitutability between capital and energy.

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Section: Literature Reviewmentioning

confidence: 99%

Can the Energy Transition Be Smooth? A General Equilibrium Approach to the EROEI

2020

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“…The expressions for optimal control on the intervals (10)- (13) are written under assumption of these controls belonging to the set of admissible controls U i . In other cases, the solution lies in the board of the compact set.…”

Section: Intervals Calculationsmentioning

confidence: 99%

“…This game formulation leads to the fact that the player's payoff takes the form of the sum of integrals with different, but adjoint time intervals and the problem can be considered in terms of hybrid differential games [11,12]. For more examples of games with regime switching see, e.g., [13][14][15].…”

Section: Introductionmentioning

confidence: 99%

A Differential Game with Random Time Horizon and Discontinuous Distribution

2020

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One class of differential games with random duration is considered. It is assumed that the duration of the game is a random variable with values from a given finite interval. The cumulative distribution function (CDF) of this random variable is assumed to be discontinuous with two jumps on the interval. It follows that the player’s payoff takes the form of the sum of integrals with different but adjoint time intervals. In addition, the first interval corresponds to the zero probability of the game to be finished, which results in terminal payoff on this interval. The method of construction optimal solution for the cooperative scenario of such games is proposed. The results are illustrated by the example of differential game of investment in the public stock of knowledge.

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“…For instance, Shao, Yang & Zhang (2017) proposed a framework for policymakers that finds the optimal subsidies or optimal price discount rates to incentivize the adoption of electric vehicles. Bonneuil & Boucekkine (2016) analyze the optimal moment for adopting renewable energies and the optimal rate of adoption. Kowalski, Stagl, Madlener & Omann (2009) use a participatory multi-criteria analysis to assess di↵erent renewable energy scenarios of technology deployment.…”

Section: Introductionmentioning

confidence: 99%