Amigues, Jean-Pierre, Lafforgue, Gilles and Moreaux, Michel (2012) Optimal timing of CCS policies with heterogeneous energy consumption sectors. TSE Working Paper, n. 12-326, Toulouse

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Using the Chakravorty et al. (2006) ceiling model, we characterize the optimal
consumption paths of three energy resources: dirty oil, which is non-renewable and
carbon emitting; clean oil, which is also non-renewable but carbon-free thanks to an
abatement technology, and solar energy, which is renewable and carbon-free. The
resulting energy-mix can supply the energy needs of two sectors. These sectors differ
in the additional abatement cost they have to pay for consuming clean rather than
dirty oil (sector 1 can abate its emissions at a lower cost than sector 2). We show
that it is optimal to begin by fully capturing sector 1’s emissions before the ceiling
is reached. Also, there may exist optimal paths along which both capture devices
have to be activated. In this case first sector’s 1 emissions are fully abated before
sector 2 abates partially. Finally, we discuss the effect of heterogeneity regarding the
abatement cost on the uniqueness of the sectoral energy price paths.

Item Type: Monograph (Working Paper)
Language: English
Date: 23 July 2012
Place of Publication: Toulouse
Uncontrolled Keywords: Energy resources, Carbon stabilization cap, Heterogeneity, Carbon capture and storage, Air capture
JEL Classification: Q32 - Exhaustible Resources and Economic Development
Q42 - Alternative Energy Sources
Q54 - Climate; Natural Disasters
Q58 - Government Policy
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 09 Jul 2014 17:27
Last Modified: 02 Apr 2021 15:47
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