IAEE Members and subscribers to The Energy Journal: Please log in to access the full text article or receive discounted pricing for this article.

Induced Technological Change in a Limited Foresight Optimization Model

Abstract:
The threat of global warming calls for a major transformation of the energy system in the coming century. The treatment of technological change in energy system models is a critical challenge. 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 incorporates 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 policies 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, primarily in the transport sector.

Purchase ( $25 )

Energy Specializations: Energy Modeling – Other; Energy and the Environment – Climate Change and Greenhouse Gases; Energy and the Environment – Policy and Regulation

JEL Codes: Q42: Alternative Energy Sources, Q41: Energy: Demand and Supply; Prices, Q35: Hydrocarbon Resources, Q54: Climate; Natural Disasters and Their Management; Global Warming

Keywords: Induced technological change, GET-LFL model, CO2 emissions, Climate policy

DOI: 10.5547/ISSN0195-6574-EJ-VolSI2006-NoSI1-4

Published in Endogenous Technological Change, Special Issue #1 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

© 2023 International Association for Energy Economics | Privacy Policy | Return Policy