The Imaclim-R model: infrastructures, technical inertia and the costs of low carbon futures under imperfect foresight

H. Waisman, Céline Guivarch, F. Grazi and Jean Charles Hourcade ()
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H. Waisman: CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique
F. Grazi: CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, AFD - Agence française de développement
Jean Charles Hourcade: CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper analyzes the transition costs of moving towards a low carbon society when the second-best nature of the economy is accounted for. We emphasize the consequences on mitigation costs of considering the interplay between a) technical systems inertia, including slow infrastructure turnover in transportation and construction; and b) imperfect foresight influencing investment decisions. To this end, the hybrid general equilibrium modeling framework I maclim-R is employed as it allows for transitory partial adjustments of the economy and captures their impact on the dynamics of economic growth. The modeling exercise quantitatively emphasizes the a) specific risks that the interplay between inertia and imperfect foresight leads to high macroeconomic costs of carbon abatement measures; b) opportunities of co-benefits from climate policies permitted by the correction of sub-optimalities in the reference scenarios. The article draws insights for the framing of future climate architectures by studying the role of measures that act complementarily to carbon pricing in the transport sector. In particular, reallocating public investment towards low-carbon transport infrastructure significantly reduces the overall macroeconomic costs of a given GHG stabilization target and even creates the room for long-term net economic benefits from climate policies. © 2012 Springer Science+Business Media B.V.

Keywords: economics (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (49)

Published in Climatic Change, 2012, 114 (Special issue), pp.101-120. ⟨10.1007/s10584-011-0387-z⟩

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Journal Article: The I maclim-R model: infrastructures, technical inertia and the costs of low carbon futures under imperfect foresight (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00719279

DOI: 10.1007/s10584-011-0387-z

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