This research paper considers a "technology-led approach" to mitigating CO2 emissions and stabilizing climateover the course of the 21st century. This approach would focus effort and commitments on researching and developing effective, scalable, and competitive carbon emission-free energy technologies to displace carbon–emitting ones.
Carbon pricing would play two ancillary roles. A low carbon charge ($5.00/tCO2) would be used to finance long-term commitments to energy R&D. Over time, the charge (tax) would slowly rise, doubling every decade, thereby sending a forward price signal to deploy and diffuse technologies as they “reach the shelf”.
The rationales for a technology-led approach to climate policy rest on: (a) the huge energy technology challenge to stabilizing climate; (b) the lack of readiness of current carbon-emission freeenergy technologies; (c) the energy intensive nature of growth in populous developing countries, especially in Asia; (d) the economic and political limitations of a carbon pricing-led policy; and (e) the large economic cost of “brute force” mitigation policies.
The paper also addresses a concern about technology policies: they may succumb to factors that generate waste at the expense of good results. The paper proposes a number of means which would enhance the policy’s “incentive compatibility”.
The paper goes on to consider whether in its early stages the technology policy should focus on “enabling”or “breakthrough” technologies, or both.
Professor Gregory Nemet finds that the Assessment Paper clearly establishes the inexorable growth in demand for energy services over the current century, the magnitude of the technological revolution required to address climate change, and the inability, for various reasons, of on the shelf technologies to adequately fulfill the required technological change. This PerspectivePaper generally agrees with their conclusion that comparing a Technology-Led Policy to "Brute Force Mitigation" produces benefit cost ratios well above one. It considers and elaborates on points that are central to this calculation, including the point that a carbon price signal is insufficient to induce the technology development investments required to limit global temperature increase, and that the technology-led policy will shift the bulk of technological decision-making from the private sector to the public sector.
Dr Valentina Bosetti finds that R&D will be an essential part of any climate policy, independently of how stringent the optimal climate policy is believed to be; R&D policy alone will not do the trick, unless the goal is simply to diversify energy provision rather than significantly reduce emissions; and that combining R&D and climate policies (as for example through an international fund for breakthrough technologies R&D) might lead to efficiency gains and help contain climate policy costs.
She also specifically focuses on R&D in Carbon Storage as a solution to Climate Change. Although uncertainties are very relevant when dealing with R&D investments, a program aiming at decreasing capturing costs or increasing the CO2 capture rate is shown to pass the cost-benefit test, if a climate policy is in place.
Analysis Papers, written by experts in this field, provide a comprehensive exploration of the costs and benefits of one solution to climate change.
Perspective Papers provide a critique of the assumptions and calculations used in the Analysis Paper, and provide another expert opinion on this solution to climate change.
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Prof. Chris Green
Author of An Analysis of a Technology-led Climate Policy as a Response to Climate Change. Prof. Chris Green is a Professor of Economics in the Department of Economics at McGill University. His main teaching and research fields are Industrial Organization; Public Policies Toward Business; and Environmental Economics, in particular the Economics of Climate Change.
Prof. Gregory Nemet
Author of A Perspective Paper on a Technology-led Climate Policy as a Response to Climate Change. Gregory Nemet is an assistant professor at the University of Wisconsin in the La Follette School of Public Affairs and the Nelson Institute for Environmental Studies. He is also a member of the University's Energy Sources and Policy Cluster and a senior fellow at the University's Center for World Affairs and the Global Economy. His research and teaching focus on improving understanding of the environmental, social, economic, and technical dynamics of the global energy system. A central focus of his research involves empirical analysis of the processes of innovation and technological change.
Dr. Valentina Bosetti
Author of A Perspective Paper on a Technology-led Climate Policy, Including an Analysis of Geological Carbon Sequestration as a Response to Climate Change. Dr. Valentina Bosetti holds a Ph.D. in Computational Mathematics and Operation Research from the Università Statale of Milan and a Master Degree in Environmental and Resources Economics from University College of London. At FEEM since 2003, she works as a modeler for the Sustainable Development Program, leading the Climate Change topic and coordinating a research group on numerical analysis of carbon mitigation options and policies. She has also collaborated with a number of other institutes such as the Euro-Mediterranean Center on Climate Change, the NOAA and Italian Universities. Her main research interest is socio-economic modeling of climate change with particular emphasis on innovation, uncertainty and irreversibility.