Developing the PAGE2002 Model with Endogenous Technical Change

Stephan Alberth and Chris Hope

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: Presented research demonstrates the inclusion of endogenous technical change into the PAGE2002 integrated assessment model of climate change. The ‘experience curve’ or learning-by-doing concept, made popular by the Boston Consulting Group during the 1960’s provides a mechanism with which to describe cost reduction through experiential learning. The implementation of learning requires both a restructuring of the way costs are modelled as well as the inclusion of an explicit learning function with initial abatement costs and learning coefficients calibrated to historical renewable energy data. The discounted values for total abatement costs are calculated for both the standard PAGE2002 model without an explicit learning function and the modified PAGE2002 model. The results were found to be of a similar magnitude, partially due to the myopic effects of discounting, though the result was found to be highly sensitive to the learning rate used, which in our case was a conservative estimate.

Keywords: Endogenous Technical Change; Learning Curves; Climate Change (search for similar items in EconPapers)
JEL-codes: O13 Q55 Q56 (search for similar items in EconPapers)
Pages: 28
Date: 2006-04
New Economics Papers: this item is included in nep-cse and nep-ene
Note: IO
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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