Option values of low carbon technology policies

Option values of low carbon technology policies: how to combine irreversibility effects and learning-by-doing in decisions / Dominique Finon and Guy Meunier. Cambridge : Electricity Policy Research Group, 2012, 25 p. (EPRG ; 1215)

http://www.eprg.group.cam.ac.uk/wp-content/uploads/2012/06/EPRG-WP1215_Complete.pdf

In this paper, the political dilemma of the deployment of a large-size low carbon technology (LCT) is analyzed. A simple dynamic model is developped to analyze the interrelation between irreversible investments and learning-by-doing within a context of exogeneous uncertainty on carbon price. Contrasting results are obtained. In some cases, the usual irreversibility effects hold, fewer plants of the LCT should be developed when information is anticipated. In other cases, this result is reversed and information arrival can justify an early deployment of the LCT. More precisely, it is shown that marginal reasoning is limited when learningby- doing, and more generally endogenous technical change, is considered. When information arrival is anticipated the optimal policy can move from a corner optimum with no LCT deployment to an interior optimum with a strictly positive development. (© EPRG)



Citer ce billet
Danièle Revel (2012, 18 juin). Option values of low carbon technology policies. Veille énergie climat. Consulté le 27 mai 2024, à l’adresse https://doi.org/10.58079/o9qp

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