Economics at your fingertips  

Uncertainties in Responding to Climate Change: On the Economic Value of Technology Policies for Reducing Costs and Creating Options

Demetrios Papathanasiou and Dennis Anderson

The Energy Journal, 2001, vol. Volume22, issue Number 3, 79-114

Abstract: The paper presents a simplified model of the form often used to project long-term emissions of carbon dioxide from energy production and use. It then considers three uncertainties in parameters of the model concerning (a) the rate of improvement in energy efficiency, (b) the costs of environmental damage, arid (c) the rate of technical progress in the development and use of technologies for abating CO2 emissions. Monte Carlo analysis is used to estimate the frequency distributions of costs and benefits under different policy assumptions. The results suggest that the possibilities of an economic surprise cannot be ruled out and that 'technology policies' to support the development of non-carbon technologies directly are robust under uncertainty. Such policies can also be defended by reference to their option value, to their environmental benefits, and to the positive externalities of innovation.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 2001
References: Add references at CitEc
Citations View citations in EconPapers (9) Track citations by RSS feed

Downloads: (external link) (text/html)
Access to full text is restricted to IAEE members and subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from

Access Statistics for this article

More articles in The Energy Journal from International Association for Energy Economics Contact information at EDIRC.
Bibliographic data for series maintained by David Williams ().

Page updated 2018-10-27
Handle: RePEc:aen:journl:2001v22-03-a04