Optimal timing of carbon capture policies under learning-by-doing

Jean-Pierre Amigues, Gilles Lafforgue and Michel Moreaux

Journal of Environmental Economics and Management, 2016, vol. 78, issue C, 20-37

Abstract: Using a standard Hotelling model of resource exploitation, we determine the optimal energy consumption paths from three options: dirty coal, which is non-renewable and carbon-emitting; clean coal, which is also non-renewable but carbon-free thanks to carbon capture and storage (CCS); and solar energy, which is renewable and carbon-free. We assume that the atmospheric carbon stock cannot exceed an exogenously given ceiling. Taking into account learning-by-doing in CCS technology, we show the following results: (i) clean coal exploitation cannot begin before the outset of the carbon constrained phase and must stop strictly before the end of this phase; (ii) the energy price path can evolve non-monotonically over time; and (iii) when the solar cost is low enough, an unusual energy consumption sequence along with solar energy is interrupted for some time and replacement by clean coal may exist.

Keywords: Climate change; Energy substitution; Carbon capture and storage; Learning-by-doing (search for similar items in EconPapers)
JEL-codes: O44 Q31 Q42 Q54 Q55 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Working Paper: Optimal Timing of Carbon Capture Policies under Learning-by-doing (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:78:y:2016:i:c:p:20-37

DOI: 10.1016/j.jeem.2016.02.002

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