Advanced technologies in energy-economy models for climate change assessment

Jennifer F. Morris, John Reilly and Y.-H. Henry Chen

Energy Economics, 2019, vol. 80, issue C, 476-490

Abstract: Considerations regarding the roles of advanced technologies are crucial in energy-economic modeling, as these technologies, while usually not yet commercially viable, could substitute for fossil energy when favorable policies are in place. To improve the representation of the penetration of advanced technologies in energy-economic models, we present a formulation that is parameterized based on observations, while capturing elements of rent and real adjustment cost increases if high demand due to a large policy shock suddenly appears. The formulation is applied to a global computable general equilibrium model to explore the role of low-carbon alternatives in the electric power sector. While other modeling approaches often adopt specific constraints on expansion, our approach is based on the assumption and observation that these constraints are not absolute, and how fast advanced technologies will expand is endogenous to economic incentives. The policy simulations, while not intended to represent realistic price paths, are designed to illustrate the response of our technology diffusion approach under sudden increased demand for advanced technologies.

Keywords: Technology diffusion; Adjustment costs; Computable general equilibrium model; Energy; Climate policy (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0140988319300490
Full text for ScienceDirect subscribers only

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: https://EconPapers.repec.org/RePEc:eee:eneeco:v:80:y:2019:i:c:p:476-490

DOI: 10.1016/j.eneco.2019.01.034

Access Statistics for this article

Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().