Energy Conversion Rate Improvements, Pollution Abatement Efforts and Energy Mix: The Transition toward the Green Economy under a Pollution Stock ConstraintJean-Pierre Amigues and Michel Moreaux No 19-994, TSE Working Papers from Toulouse School of Economics (TSE) Abstract: To prevent climate change, three options are currently considered: improve the energy conversion efficiency of primary energy sources, develop carbon free alternatives to polluting fossil fuels and abate potential emissions before they are released inside the atmosphere. We study the optimal mix and timing of these three mitigation options in a stylized dynamic model. Useful energy can come from two sources: a non-renewable fossil fuel resource and a carbon free renewable resource. The conversion efficiency rate of fossil energy into useful energy is open to choice but higher conversion rates are also more costly. The economy can abate some fraction of its potential emissions and a higher abatement rate incurs higher costs. The society objective is to maintain below some mandated level, or carbon cap, the atmospheric carbon concentration. In the empirically relevant case where the economy is actually constrained by the cap, at least temporarily, we show that the optimal path is a sequence of four regimes: a ’pre-ceiling’ regime before the economy is actually constrained by the cap, a ’ceiling’ regime at the cap, a ’post-ceiling’ regime below the cap and a final regime of exclusive exploitation of renewable resources. If the abatement option has ever to be used, it should be started before the beginning of the ceiling regime, first at an increasing rate and at a decreasing rate once the cap constraint binds. The efficiency performance from any source steadily improves with the exception of a time phase under the ceiling regime when it is constant. Renewables take progressively a larger share of the energy mix but their exploitation may be delayed significantly. Absolute levels of carbon emissions drop down continuously but follow a non monotonic pattern in per useful energy unit relative terms.To prevent climate change, three options are currently considered: improve the energy conversion efficiency of primary energy sources, develop carbon free alternatives to polluting fossil fuels and abate potential emissions before they are released inside the atmosphere. We study the optimal mix and timing of these three mitigation options in a stylized dynamic model. Useful energy can come from two sources: a non-renewable fossil fuel resource and a carbon free renewable resource. The conversion efficiency rate of fossil energy into useful energy is open to choice but higher conversion rates are also more costly. The economy can abate some fraction of its potential emissions and a higher abatement rate incurs higher costs. The society objective is to maintain below some mandated level, or carbon cap, the atmospheric carbon concentration. In the empirically relevant case where the economy is actually constrained by the cap, at least temporarily, we show that the optimal path is a sequence of four regimes: a ’pre-ceiling’ regime before the economy is actually constrained by the cap, a ’ceiling’ regime at the cap, a ’post-ceiling’ regime below the cap and a final regime of exclusive exploitation of renewable resources. If the abatement option has ever to be used, it should be started before the beginning of the ceiling regime, first at an increasing rate and at a decreasing rate once the cap constraint binds. The efficiency performance from any source steadily improves with the exception of a time phase under the ceiling regime when it is constant. Renewables take progressively a larger share of the energy mix but their exploitation may be delayed significantly. Absolute levels of carbon emissions drop down continuously but follow a non monotonic pattern in per useful energy unit relative terms. Keywords: energy efficiency; carbon pollution; non-renewable resources; renewable resources; abatement. (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:tse:wpaper:122842 Access Statistics for this paper More papers in TSE Working Papers from Toulouse School of Economics (TSE) 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.