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Importance of Technological Change and Spillovers in Long-Term Climate Policy

Shilpa Rao, Ilkka Keppo and Keywan Riahi

Year: 2006
Volume: Endogenous Technological Change
Number: Special Issue #1
DOI: 10.5547/ISSN0195-6574-EJ-VolSI2006-NoSI1-5
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Abstract:
This paper examines the role of technological change and spillovers within the context of a climate policy in a long-term scenario of the global energy system. We use the energy-systems optimization model MESSAGE considering endogenous learning for various technologies, such that they experience cost reductions as a function of accumulated capacity installations. We find that the existence of technological learning while reducing overall energy system costs becomes particularly important in the context of a long-term climate policy. Diversity in technological portfolios is emphasized and results indicate deployment of a range of energy technologies in reducing emissions. An important finding is that technological learning by itself is not sufficient for climate stabilization and that climate policies are an absolute necessary complimentary element. Under a climate constraint, spillovers across technologies and regions due to learning results in increased upfront investments and hence lower costs of carbon free technologies, thus resulting in technology deployment and emissions reductions, especially in developing countries. We conclude that learning and spillover effects can lead to technologically advanced cost-effective global energy transition pathways. We suggest that coordinated climate stabilization policies can serve as important institutional mechanisms that facilitate the required technological investments, especially in developing countries and thus ensure long-term cost reductions.



The Role of Non-CO2 Greenhouse Gases in Climate Change Mitigation: Long-term Scenarios for the 21st Century

Shilpa Rao and Keywan Riahi

Year: 2006
Volume: Multi-Greenhouse Gas Mitigation and Climate Policy
Number: Special Issue #3
DOI: 10.5547/ISSN0195-6574-EJ-VolSI2006-NoSI3-9
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Abstract:
The non-CO2 greenhouse gases have so far jointly contributed around 40 percent to overall global warming. In this paper we examine the role of non-CO2 greenhouse gases in meeting long-term climate change targets. For this purpose, we develop climate mitigation scenarios aimed at achieving long-term stabilization of global radiative forcing. We use the MESSAGE model for a thorough bottom-up representation of the six Kyoto greenhouse gases and corresponding mitigation technologies. This approach endogenizes energy feedback effects from mitigation of non-CO2 gases and takes into account the interplay and side benefits that exist across GHGs. We analyze two mitigation scenarios that stabilize global radiative forcing at 4.5 W/m2 as compared to pre-industrial times�one allowing only for CO2 mitigation and another with multigas mitigation. In addition, we also investigate a lower stabilization level of 3 W/m2 and look into the implications this has for abatement strategies. Our approach helps us to identify a portfolio of measures in the energy, industry and agricultural sectors for achieving a proposed climate target. We find that considering the full basket of GHGs improves the effectiveness of the mitigation portfolio resulting in significantly lower costs, especially in the short term. In the long run, the bulk of the emissions reductions are still found to come from CO2 and this effect becomes more pronounced under the more stringent climate target. This emphasizes the importance of a diverse mitigation portfolio that includes both CO2 and non-CO2 related abatement options in meeting long-term climate targets.





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