Discussion Papers no. 639

Intertemporal effects under imperfect climate policy

Cutting costs of catching carbon

We use a two-period model to investigate intertemporal effects of cost reductions in climate change mitigation technologies for the power sector. With imperfect climate policies, cost reductions related to carbon capture and storage (CCS) may be more desirable than comparable cost reductions related to renewable energy. The finding rests on the incentives fossil resource owners face. With regulations of emissions only in the future, cheaper renewables speed up extraction (the `green paradox'), whereas CCS cost reductions make fossil resources more attractive for future use and lead to postponement of extraction.

Om publikasjonen

Tittel

Cutting costs of catching carbon. Intertemporal effects under imperfect climate policy

Ansvarlige

Michael Hoel, Svenn Jensen

Serie og -nummer

Discussion Papers no. 639

Utgiver

Statistics Norway

Emne

Discussion Papers

ISSN

1892-753X

Antall sider

32

Målform

Engelsk

Om Discussion Papers

Discussion papers comprise research papers intended for international journals and books. A preprint of a Discussion Paper may be longer and more elaborate than a standard journal article as it may include intermediate calculations, background material etc.

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