Defining the Abatement Cost in Presence of Learning-by-Doing: Application to the Fuel Cell Electric Vehicle

Anna Creti, Alena Kotelnikova, Guy Meunier and Jean-Pierre Ponssard
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Anna Creti: Ecole Polytechnique, Université Paris-Saclay
Alena Kotelnikova: Ecole Polytechnique, Université Paris-Saclay

Environmental & Resource Economics, 2018, vol. 71, issue 3, No 8, 777-800

Abstract: Abstract We consider a partial equilibrium model to study the optimal phasing out of polluting goods by green goods. The unit production cost of the green goods involves convexity and learning-by-doing. The total cost for the social planner includes the private cost of production and the social cost of carbon, assumed to be exogenous and growing at the social discount rate. Under these assumptions the optimization problem can be decomposed in two questions: (i) when to launch a given schedule; (ii) at which rate the transition should be completed that is, the design of a transition schedule as such. The first question can be solved using a simple indicator interpreted as the MAC of the whole schedule, possibly non optimal. The case of hydrogen vehicle (Fuel Cell Electric Vehicles) offers an illustration of our results. Using data from the German market we show that the 2015–2050 trajectory foreseen by the industry would be consistent with a carbon price at 52€/t. The transition cost to achieve a 7.5 M car park in 2050 is estimated at 21.6 billion € that is, to JEl 4% discount rate, 115 € annually for each vehicle which would abate 2.18 tCO $$_2$$ 2 per year.

Keywords: Dynamic abatement costs; Learning by doing; Fuel cell electric vehicles (search for similar items in EconPapers)
JEL-codes: C61 Q42 Q55 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (6)

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Working Paper: Defining the Abatement Cost in Presence of Learning-by-doing: Application to the Fuel Cell Electric Vehicle (2015)
Working Paper: Defining the abatement cost in presence of learning-by-doing: application to the fuel cell electric vehicle (2015)
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DOI: 10.1007/s10640-017-0183-y

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