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Moreaux, Michel
, Amigues, Jean-Pierre and Nguyen, Manh-Hung
ORCID: https://orcid.org/0000-0003-1887-0226
(2026)
Capital Sunk, Emissions Locked: The Economics of Energy Transitions under Carbon Constraints.
TSE Working Paper, n. 26-1721, Toulouse
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Abstract
Optimal energy transitions are characterized in an economy where fossil energy requires dedicated conversion capital that is costly to reverse and where cumulative emissions are capped by an exogenous carbon budget. Short-run complementarity
between fossil inputs and sector-specific capital interacts with intertemporal scarcity of the remaining budget. The optimal path typically selects an expansion regime, a production plateau, a decline regime, and a post-fossil steady state. The plateau
is pinned down by the need to operate in order to amortize sunk conversion capital while the shadow value of remaining emissions rises over time. These forces generate non-monotone useful-energy prices and deliver sharp conditions under which dedicated fossil capital becomes stranded.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | February 2026 |
| Place of Publication: | Toulouse |
| Uncontrolled Keywords: | Carbon constraint, Nonrenewable resources, Renewable resources, Energy transition, Hotelling rule |
| JEL Classification: | E22 - Capital; Investment (including Inventories); Capacity Q00 - General Q32 - Exhaustible Resources and Economic Development Q43 - Energy and the Macroeconomy Q54 - Climate; Natural Disasters |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Ecole doctorale: | Toulouse School of Economics (Toulouse) |
| Site: | UT1 |
| Date Deposited: | 23 Feb 2026 08:14 |
| Last Modified: | 26 Feb 2026 14:13 |
| OAI Identifier: | oai:tse-fr.eu:131485 |
| URI: | https://publications.ut-capitole.fr/id/eprint/52413 |
