How inertia and limited potentials affect the timing of sectoral abatements in optimal climate policy
Adrien Vogt-Schilb,
Guy Meunier and
Stephane Hallegatte
Post-Print from HAL
Abstract:
This paper investigates the optimal timing of greenhouse gas abatement efforts in a multi-sectoral model with economic inertia, each sector having a limited abatement potential. It defines economic inertia as the conjunction of technical inertia --- a social planner chooses investment on persistent abating activities, as opposed to choosing abatement at each time period independently --- and increasing marginal investment costs in abating activities. It shows that in the presence of economic inertia, optimal abatement efforts (in dollars per ton) are bell-shaped and trigger a transition toward a low-carbon economy. The authors prove that optimal marginal abatement costs should differ across sectors: they depend on the global carbon price, but also on sector-specific shadow costs of the sectoral abatement potential. The paper discusses the impact of the convexity of abatement investment costs: more rigid sectors are represented with more convex cost functions and should invest more in early abatement. The conclusion is that overlapping mitigation policies should not be discarded based on the argument that they set different marginal costs (''different carbon prices'') in different sectors.
Keywords: climate change mitigation; sectoral policies; optimal policies; optimal timing; inertia; when-flexibility; how-flexibility; overlapping policies (search for similar items in EconPapers)
Date: 2012-08-01
New Economics Papers: this item is included in nep-ene and nep-env
Note: View the original document on HAL open archive server: https://enpc.hal.science/hal-00722574v2
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39)
Published in World Bank Policy Research, 2012, pp.6154. ⟨10.1596/1813-9450-6154⟩
Downloads: (external link)
https://enpc.hal.science/hal-00722574v2/document (application/pdf)
Related works:
Working Paper: How inertia and limited potentials affect the timing of sectoral abatements in optimal climate policy (2013)
Working Paper: How inertia and limited potentials affect the timing of sectoral abatements in optimal climate policy (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00722574
DOI: 10.1596/1813-9450-6154
Access Statistics for this paper
More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().