Sensitivity of energy system investments to policy regulation changes: Application of the blue sky catastrophe

Anton Bondarev () and Hannes Weigt

Working papers from Faculty of Business and Economics - University of Basel

Abstract: In this paper we argue, that the interaction of technology and economic policy regulations in the energy sector may be described by the so-called slow-fast class of dynamical systems. It is known that such systems may exhibit the blue sky catastrophe, a special type of bifurcation. Application of this result allows us to argue that caution is needed when updating economic policies in the energy sector to avoid the onset of catastrophic developments in the system's transformation, when energy system dynamics becomes unresponsive to policy updates.

Keywords: energy infrastructure; investments cycle; economic policy; slow-fast systems; blue sky catastrophe (search for similar items in EconPapers)
JEL-codes: C02 C6 L51 Q48 (search for similar items in EconPapers)
Date: 2017-05-11
New Economics Papers: this item is included in nep-ene
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Persistent link: https://EconPapers.repec.org/RePEc:bsl:wpaper:2017/08

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