Price, quantity, and technology strategies for climate change policy

Montgomery, David; Smith, Anne E.

doi:10.1017/cbo9780511619472.032

Cited by 41 publications

(29 citation statements)

References 17 publications

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“…In contrast to our paper, Grimaud and Rouge focus only on first-best policy. In a secondbest context, our results also support the arguments of Montgomery and Smith [15] and Fisher and Newell [8], although the context is different from ours in both cases. As claimed by these authors, an emissions price high enough to induce the needed innovation cannot be credibly implemented and, therefore, R&D is the key for dealing with climate change.…”

Section: Introductionsupporting

confidence: 85%

Innovation and Environmental Policy: Clean vs. Dirty Technical Change

Cunha-e-Sá¹,

Leitão²,

Reis³

2010

SSRN Journal

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We study a two sector endogenous growth model with environmental quality with two goods and two factors of production, one clean and one dirty. Technological change creates clean or dirty innovations. We compare the laissez-faire equilibrium and the social optimum and study first-and second-best policies. Optimal policy encourages research toward clean technologies. In a second-best world, we claim that a portfolio that includes a tax on the polluting good combined with optimal innovation subsidy policies is less costly than increasing the price of the polluting good alone. Moreover, a discriminating innovation subsidy policy is preferable to a non-discriminating one.

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Section: Introductionsupporting

confidence: 85%

Innovation and Environmental Policy: Clean vs. Dirty Technical Change

Cunha-e-Sá¹,

Leitão²,

Reis³

2010

SSRN Journal

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“…Even in the event of a strong bi-partisan commitment to abatement, future governments may be motivated to subsequently lower the carbon price if competitive lowemission baseload technologies emerge. Since innovators are aware of this, the -announcement affect‖ of high future carbon prices will tend to be discounted [111,112].…”

Section: Risks and Uncertainties Of Future Energy Technologies And Camentioning

confidence: 99%

Household Solar Photovoltaics: Supplier of Marginal Abatement, or Primary Source of Low-Emission Power?

Palmer¹

2013

Sustainability

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Abstract:With declining system costs and assuming a short energy payback period, photovoltaics (PV) should, at face value, be able to make a meaningful contribution to reducing the emission intensity of Australia's electricity system. However, solar is an intermittent power source and households remain completely dependent on a -less than green‖ electricity grid for reliable electricity. Further, much of the energy impact of PV occurs outside of the conventional boundaries of PV life-cycle analyses (LCA). This paper examines these competing observations and explores the broader impacts of a high penetration of household PV using Melbourne, Victoria as a reference. It concludes that in a grid dominated by unsequestered coal and gas, PV provides a legitimate source of emission abatement at high, but declining costs, with the potential for network and peak demand support. It may be technically possible to integrate a high penetration of PV, but the economic and energy cost of accommodating high-penetration PV erodes much of the benefits. Future developments in PV, storage, and integration technologies may allow PV to take on a greater long term role, but in the time horizon usually discussed in climate policy, a large-scale expansion of household PV may hinder rather than assist deep cuts to the emission intensity of Australia's electricity system.

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“…Such long-term issues arise often when studying problems such as climate change, and they raise the question of whether additional policy measures are needed that (i) enable the government to establish strong expectations of future prices, or (ii) perform the initial research necessary to get ground-breaking technologies close to market, thus lowering the cost of future environmental policy. A related concern that has been raised is the credibility of governments to use the promise of high future emissions prices to boost current innovation, since such high prices may no longer be needed once the resulting cost reductions arrive (Kennedy and Laplante, 1999;Montgomery and Smith, 2007).…”

Section: Complementarities Between Environmental and Technology Pomentioning

confidence: 99%

The role of markets and policies in delivering innovation for climate change mitigation

Newell¹

2010

Oxford Review of Economic Policy

127

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This paper identifies market incentives and international and domestic policies that could technologically alter energy systems to achieve greenhouse gas stabilization targets while also meeting other societal goals. I consider the conceptual basis and empirical evidence on the effectiveness and efficiency of climate technology policies. The paper reviews the literature on trends and prospects for innovation in climate change mitigation and examines the evidence on induced innovation and the implications for the choice of technology policy. I then consider the impact of technological advances on the environment, the role of direct government support for R&D, and the complementarities between policies internalizing environmental externalities and those aimed at environmental innovations.

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Price, quantity, and technology strategies for climate change policy

Cited by 41 publications

References 17 publications

Innovation and Environmental Policy: Clean vs. Dirty Technical Change

Innovation and Environmental Policy: Clean vs. Dirty Technical Change

Household Solar Photovoltaics: Supplier of Marginal Abatement, or Primary Source of Low-Emission Power?

The role of markets and policies in delivering innovation for climate change mitigation

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