Reference

Jean-Pierre Amigues, Gilles Lafforgue, and Michel Moreaux, Optimal Timing of CCS Policies under Decreasing Returns to Scale, TSE Working Paper, n. 14-529, May 2014.

Abstract

Carbon capture and sequestration (CCS) can help to mitigate the climate change transition. Usually, in models where the atmospheric carbon stock is constrained by an institutional stabilization cap and under constant average CCS cost, the use of CCS must be delayed up to the time at which the constraint begins to be e@ective. In this paper, we show that, when abatement activity are submitted to decreasing returns to scale, abatement must start earlier, before the climate constraint becomes to bind, but they must also be stopped strictly before the climate constraints ceases to be active. Depending on the solar energy costs, either there is a return toward dirty energy or either a progressive rise of solar energy at the expense of abatement activities.

Keywords

Energy resources; carbon stabilization cap; carbon capture and storage; decreasing returns to scale

JEL codes

  • Q32: Exhaustible Resources and Economic Development
  • Q42: Alternative Energy Sources
  • Q54: Climate • Natural Disasters • Global Warming
  • Q58: Government Policy

Jean-Pierre Amigues, Gilles Lafforgue, and Michel Moreaux, Optimal Timing of Carbon Capture and Storage Policies Under Learning-by-doing, Journal of Environmental Economics and Management, vol. 78, July 2016, pp. 23–37.