sectoral economic costs and benefits of ghg mitigation - IPCC

Patrick Criqui, Nikos Kouvaritakis and Leo Schrattenholzer
- a first group of technologies steadily reducing their weight, starting from relatively high
shares: these are gas turbine combined cycles (GGT), cogeneration of heat and power with
C.C. (CHP) and coal based advanced thermodynamic cycles (ATC);
- a second group of technologies reaches a maximum within the period under consideration
and subsequently declines, following the dynamics of technology prospective and
uncertainty clearing; not only most of the "new renewables" belong to this group
(decentralised photovoltaics (DPV), wind power (WND) and biomass gasification (BGT)),
but also two R&D-intensive coal based technologies, namely supercritical coal (PFC), with a
relatively early maximum, and integrated coal gasification (ICG), with a late maximum;
- the third group is made up of technologies that remain more or less confined to low shares
within the overall energy technology R&D, i.e. small hydro (SHY), evolutionary new nuclear
design (NND) which fails to attract any private interest unlike the massive funds directed to
it by the public sector, oil combustion turbine (OCT), and solar thermal power plants (SPP);
- the fourth group is made up of the two fuel cell technologies retained (MFC and SFC) and
show ever-increasing interest towards the end of the projection horizon.
Meeting the “Kyoto II” emission reduction targets in an “endogenous technology” framework
The endogenisation of technology in the model produces different results than the exogenous
technology framework, for as much as possible similar Reference Cases. This is of course due to
a more complete and accurate description of technology dynamics in the new model. The method
used for the implementation and assessment of the scenario involves the construction of a world
marginal abatement cost curve (MAC), with the incorporation of the additional features and
mechanisms specific to the POLES version described in the preceding sub-section:
- the private R&D response mechanism to given levels of a carbon value; the procedure
adopted ensured a partial foresight mechanism by anticipating both a carbon value associated
with a given target and at the same time foreseeing its cumulative impact through both
substitution and learning effects; the foresight remains however partial because it does not
take into account the effect of the carbon value on private R&D decisions themselves;
- an effect on total R&D effort; public R&D was assumed to be unaffected by the carbon value
(a simplifying and rather debatable assumption, although current public R&D is already
focussed on low carbon technologies) and private R&D funding continues to be the same
fixed proportion of gross investment in power generating capacity; but as the power
generating sector’s response over time is to substitute carbon rich, low capital and formerly
cheap technologies by more capital intensive, low-carbon technologies, the total sales and
consequently the R&D effort of industry increases;
- the learning curves and in particular the learning by doing effects, which normally enhance
the flexibility of the energy system in responding to a given carbon value.
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