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Title:
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A sensitivity analysis of timing and costs of greenhouse gas emission reductions under learning effects and niche markets
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Author(s):
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Published by:
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Publication date:
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ECN
Policy Studies
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1-3-2004
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ECN report number:
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Document type:
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ECN-RX--04-108
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Article (scientific)
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Number of pages:
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0
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Published in: Climatic Change, 65, 2004, pp.39-71 (Springer Netherlands), , , Vol., p.-.
Abstract:
This paper analyses the optimal timing and macro-economic costs of carbon
emission reductions that mitigate the global average atmospheric temperature
increase. We use a macro-economic model in which there are two competing
energy sources, fossil-fuelled and non-fossil-fuelled. Technological
change is represented endogenously through learning curves, and niche
markets exist implying positive demand for the relatively expensive
non-fossil-fuelled energy source. Under these conditions, with a temperature
increase constraint of 2°C, early abatement is found to be optimal,
and, compared to the results of many existing top-down models, the costs
of this strategy prove to be low. We perform an extensive sensitivity
analysis of our results regarding the uncertainties that dominate various
economic and technological modeling parameters. Uncertainties in the
learning rate and the elasticity of substitution between the two different
energy sources most significantly affect the robustness of our findings.
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