The I maclim-R model: infrastructures, technical inertia and the costs of low carbon futures under imperfect foresight

Henri Waisman (waisman@centre-cired.fr), Céline Guivarch, Fabio Grazi (grazif@afd.fr) and Jean-Charles Hourcade

Climatic Change, 2012, vol. 114, issue 1, 120 pages

Abstract: This paper analyzes the transition costs of moving towards a low carbon society when the second-best nature of the economy is accounted for. We emphasize the consequences on mitigation costs of considering the interplay between a) technical systems inertia, including slow infrastructure turnover in transportation and construction; and b) imperfect foresight influencing investment decisions. To this end, the hybrid general equilibrium modeling framework I maclim-R is employed as it allows for transitory partial adjustments of the economy and captures their impact on the dynamics of economic growth. The modeling exercise quantitatively emphasizes the a) specific risks that the interplay between inertia and imperfect foresight leads to high macroeconomic costs of carbon abatement measures; b) opportunities of co-benefits from climate policies permitted by the correction of sub-optimalities in the reference scenarios. The article draws insights for the framing of future climate architectures by studying the role of measures that act complementarily to carbon pricing in the transport sector. In particular, reallocating public investment towards low-carbon transport infrastructure significantly reduces the overall macroeconomic costs of a given GHG stabilization target and even creates the room for long-term net economic benefits from climate policies. Copyright Springer Science+Business Media B.V. 2012

Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (53)

Downloads: (external link)
http://hdl.handle.net/10.1007/s10584-011-0387-z (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The Imaclim-R model: infrastructures, technical inertia and the costs of low carbon futures under imperfect foresight (2012)
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:spr:climat:v:114:y:2012:i:1:p:101-120

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/10584

DOI: 10.1007/s10584-011-0387-z

Access Statistics for this article

Climatic Change is currently edited by M. Oppenheimer and G. Yohe

More articles in Climatic Change from Springer
Bibliographic data for series maintained by Sonal Shukla (sonal.shukla@springer.com) and Springer Nature Abstracting and Indexing (indexing@springernature.com).