Induced Technological Change in a Limited Foresight Optimization Model

Fredrik Hedenus, Christian Azar and Kristian Lindgren
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Fredrik Hedenus: Chalmers University
Christian Azar: Chalmers University
Kristian Lindgren: Chalmers University

No 2005.125, Working Papers from Fondazione Eni Enrico Mattei

Abstract: The threat of global warming calls for a major transformation of the energy system the coming century. Modeling technological change is an important factor in energy systems modeling. Technological change may be treated as induced by climate policy or as exogenous. We investigate the importance of induced technological change (ITC) in GET-LFL, an iterative optimization model with limited foresight that includes learning-by-doing. Scenarios for stabilization of atmospheric CO2 concentrations at 400, 450, 500 and 550 ppm are studied. We find that the introduction of ITC reduces the total net present value of the abatement cost over this century by 3-9% compared to a case where technological learning is exogenous. Technology specific polices which force the introduction of fuel cell cars and solar PV in combination with ITC reduce the costs further by 4-7% and lead to significantly different technological solutions in different sectors, primarily in the transport sector.

Keywords: Energy system model; Limited foresight; Climate policy; Endougenous learning; Technological lock-in (search for similar items in EconPapers)
JEL-codes: O33 (search for similar items in EconPapers)
Date: 2005-10
New Economics Papers: this item is included in nep-ene, nep-ino and nep-res
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2005.125

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