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Endogenous Resource Substitution under a Climate Stabilization Policy: Can Nuclear Power Provide Clean Energy?

Author

Listed:
  • Chakravorty, Ujjayant

    (University of Alberta, Department of Economics)

  • Magne, Bertrand

    (International Energy Agency, Paris)

  • Moreaux, Michel

    (Toulouse School of Economics)

Abstract
The declared long-term goal of the Intergovernmental Panel on Climate Change (IPCC) is the stabilization of carbon concentration in the atmosphere. In this paper we impose a carbon target concentration on a partial equilibrium model of the global energy sector. Specifically, we ask whether nuclear power can provide carbon free energy as fossil fuel resources become costly due to scarcity and externality costs. We find that nuclear power can reduce the cost of generating clean energy significantly and relatively quickly. However, beyond a few decades the role of nuclear power may be considerably reduced as uranium becomes scarce and renewables become economical. The cost of carbon when nuclear power supplies a significant share of energy is much lower than that of other studies. A policy implication is that current political and regulatory impediments to the expansion of nuclear generation may prove to be costly if large volumes of clean energy need to be supplied over a relatively short period of time.

Suggested Citation

  • Chakravorty, Ujjayant & Magne, Bertrand & Moreaux, Michel, 2009. "Endogenous Resource Substitution under a Climate Stabilization Policy: Can Nuclear Power Provide Clean Energy?," Working Papers 2009-19, University of Alberta, Department of Economics, revised 01 Sep 2010.
    • Handle: RePEc:ris:albaec:2009_019
    as

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    File URL: https://sites.ualberta.ca/~econwps/2009/wp2009-19.pdf
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    References listed on IDEAS

    as
    1. Chakravorty, Ujjayant & Krulce, Darrell L, 1994. "Heterogeneous Demand and Order of Resource Extraction," Econometrica, Econometric Society, vol. 62(6), pages 1445-1452, November.
    2. van der Zwaan, B. C. C. & Gerlagh, R. & G. & Klaassen & Schrattenholzer, L., 2002. "Endogenous technological change in climate change modelling," Energy Economics, Elsevier, vol. 24(1), pages 1-19, January.
    3. Socrates Kypreos, 2008. "Stabilizing global temperature change below thresholds: Monte Carlo analyses with MERGE," Computational Management Science, Springer, vol. 5(1), pages 141-170, February.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Ujjayant Chakravorty & Marie‐Hélène Hubert & Michel Moreaux & Linda Nøstbakken, 2017. "Long‐Run Impact of Biofuels on Food Prices," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(3), pages 733-767, July.
    2. Ujjayant Chakravorty & Marie-Hélène Hubert & Michel Moreaux & Linda Nøstbakken, 2012. "Do Biofuel Mandates Raise Food Prices?," Economics Working Paper Archive (University of Rennes & University of Caen) 201214, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.

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    More about this item

    Keywords

    energy resources; global warming; hotelling models; resource substitution;
    All these keywords.

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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