Optimal Timing of Carbon Capture Policies under Learning-by-doing

Jean-Pierre Amigues, Gilles Lafforgue and Michel Moreaux

No 2015.20, Working Papers from FAERE - French Association of Environmental and Resource Economists

Abstract: Using a standard Hotelling model of resource exploitation, we determine the optimal energy consumption paths from three options: dirty coal, which is non-renewable and carbon-emitting; clean coal, which is also non-renewable but carbon-free thanks to carbon capture and storage (CCS); and solar energy, which is renewable and carbon-free. We assume that the atmospheric carbon stock cannot exceed an exogenously given ceiling. Taking into account learning-by-doing in CCS technology, we show the following results: i) Clean coal exploitation cannot begin before the outset of the carbon constrained phase and must stop strictly before the end of this phase; ii) The energy price path can evolve non-monotonically over time; and iii) When the solar cost is low enough, an unusual energy consumption sequence along which solar energy is interrupted for some time and replaced by clean coal may exist.

Keywords: Clean Energy; Food Demand; Land Quality; Renewable Fuel Standards; Transportation (search for similar items in EconPapers)
JEL-codes: Q24 Q32 Q42 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2015-11
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
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Published in Journal of Environmental Economics and Management, 78, 20-37.

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http://faere.fr/pub/WorkingPapers/Amigues_Lafforgue_Moreaux_FAERE_WP2015.20.pdf First version, 2015 (application/pdf)

Related works:
Journal Article: Optimal timing of carbon capture policies under learning-by-doing (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:fae:wpaper:2015.20

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