Cutting Costs of Catching Carbon. Intertemporal effects under imperfect climate policy

Michael Hoel () and Svenn Jensen

Discussion Papers from Statistics Norway, Research Department

Abstract: We use a two-period model to investigate intertemporal effects of cost reductions in climate change mitigation technologies for the power sector. With imperfect climate policies, cost reductions related to carbon capture and storage (CCS) may be more desirable than comparable cost reductions related to renewable energy. The finding rests on the incentives fossil resource owners face. With regulations of emissions only in the future, cheaper renewables speed up extraction (the `green paradox'), whereas CCS cost reductions make fossil resources more attractive for future use and lead to postponement of extraction.

Keywords: climate change; exhaustible resources; carbon capture and storage; renewable energy; green paradox (search for similar items in EconPapers)
JEL-codes: Q30 Q42 Q54 (search for similar items in EconPapers)
Date: 2010-12
New Economics Papers: this item is included in nep-agr, nep-ene and nep-env
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Cutting costs of catching carbon—Intertemporal effects under imperfect climate policy (2012)
Working Paper: Cutting Costs of Catching Carbon - Intertemporal Effects under Imperfect Climate Policy (2010)
Working Paper: Cutting Costs of Catching Carbon - Intertemporal effects under imperfect climate policy (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ssb:dispap:639

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