scholarly journals Model uncertainty and energy technology policy: The example of induced technical change

2016 ◽  
Vol 66 ◽  
pp. 362-373 ◽  
Author(s):  
Yongyang Cai ◽  
Alan H. Sanstad
Keyword(s):  
Technical Change ◽  
Model Uncertainty ◽  
Technology Policy ◽  
Energy Technology ◽  
Induced Technical Change

Energy Technology, Policy and Valuation

2015 ◽  
pp. 1-7
Author(s):  
André B. Dorsman ◽  
John L. Simpson ◽  
Wim Westerman
Keyword(s):  
Technology Policy ◽  
Energy Technology

Induced Technical Change in Energy and Environmental Modeling: Analytic Approaches and Policy Implications

2002 ◽  
Vol 27 (1) ◽  
pp. 271-308 ◽  
Author(s):  
Michael Grubb ◽  
Jonathan Köhler ◽  
Dennis Anderson
Keyword(s):  
Climate Change ◽  
Technical Change ◽  
Energy Sector ◽  
Learning By Doing ◽  
Environmental Modeling ◽  
Policy Implications ◽  
Marginal Costs ◽  
Technological Diversity ◽  
Energy Economy ◽  
Induced Technical Change

▪ Abstract  Technical change in the energy sector is central for addressing long-term environmental issues, including climate change. Most models of energy, economy, and the environment (E3 models) use exogenous assumptions for this. This is an important weakness. We show that there is strong evidence that technical change in the energy sector is to an important degree induced by market circumstances and expectations and, by implication, by environmental policies such as CO2 abatement. We classify the main approaches to modeling such induced technical change and review results with particular reference to climate change. Among models with learning by doing, weak responses are only obtained from models that are highly aggregated (lack technological diversity) and/or that equate rates of return to innovation across sectors. Induced technical change broadens the scope of efficient policies toward mitigation, including not just research and development and aggregated market instruments but a range of sectoral-based policies potentially at divergent marginal costs. Furthermore, to the extent that cleaner technologies induced by mitigation diffuse globally, a positive spillover will result that will tend to offset the substitution-based negative spillover usually hypothesized to result from the migration of polluting industries. Initial explorations suggest that this effect could also be very large.

Sign in / Sign up

Export Citation Format

Share Document