Scenario-based policy representative exploration: A novel approach to analyzing policy portfolios and its application to low-carbon energy diffusion

Yongchao Zeng, Yingying Shi, Muhammad Shahbaz and Qin Liu

Energy, 2024, vol. 296, issue C

Abstract: The growing complexity of real-world systems entails using policy portfolios rather than a single policy instrument to achieve multiple policy goals regarding sustainability. Crucial difficulties include identifying and evaluating policies and their applicable scenarios given numerous combinations. To address these issues, this research develops scenario-based policy representative exploration (SPRE), a systematic approach to exploring policy portfolios, discovering scenarios, and evaluating scenario-specific policy effectiveness in achieving multiple policy goals. SPRE is applied to a low-carbon energy diffusion model. Six policy goals are considered, including low-carbon diffusion rate, cumulative carbon taxes, subsidies, penalties, net interventions, and low-carbon profit. The resultant 232 Pareto-optimal policy portfolios are clustered into five categories and evaluated through representative policy analysis. The findings indicate the basic production profit of unit product and technology-push effect are significant scenario components influencing policy success; the initial proportion of low-carbon adopters or relative carbon reduction ratio do not contribute prominently to policy efficacy. The efficacies of policies are also distinguished in the discovered scenarios: subsidies are effective for the low-carbon transition when the marginal profit of un-low-carbon enterprises is low; carbon taxes and penalties are partially interchangeable; punitive policies are a double-edged sword that can harm potential low-carbon adopters with low profit.

Keywords: Low-carbon technology diffusion; Scenario-based policy representative exploration; Agent-based modeling; Evolutionary game theory; Policy portfolios (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:296:y:2024:i:c:s0360544224009757

DOI: 10.1016/j.energy.2024.131202

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