 Extending the Limits of the Abatement CostGuy Meunier and Jean-Pierre Ponssard No 9707, CESifo Working Paper Series from CESifo Abstract: The paper examines the relevant cost benefit framework for public authorities investigating the potential of local projects to mitigate climate change. Because these projects are typically limited in time and space, continuation pathways need be introduced to capture the benefits provided by a project over the longer term. This issue is particularly acute in the transition toward carbon neutrality, which aims for the full abatement of emissions by a future end date. The relevant question is not whether or not to decarbonize an activity but when to do so, and how. We propose a new metric that incorporates into the analytical framework the dynamic interactions between a project and its continuation. This metric is defined as the annual overall discounted cost divided by the long term annual abatement. The new metric is a non trivial extension of the standard cost of abatement. It determines when precisely to launch a given project and addresses the question of how to compare competing projects using their on going emissions up to their respective optimal launch dates. Two illustrations make clear the novelty of our approach: the choice of the optimal mix of technologies for the electricity sector and the comparison between competing green technologies for mobility. Keywords: cost benefit analysis; abatement cost; time value of money; learning-by-doing (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_9707 Access Statistics for this paper More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.