| ID | 169837 |
| Title Proper | Global competition dynamics of fossil fuels and renewable energy under climate policies and peak oil |
| Other Title Information | a behavioural model |
| Language | ENG |
| Author | Zeppini, Paolo |
| Summary / Abstract (Note) | We develop a stochastic decision model to analyse the global competitive dynamics of fossil fuels and renewable energy. It describes coal, oil/gas, solar and wind. These differ not only in pollution intensities but also in profitability and innovation potential. The model accounts for the effect of learning curves, path-dependence and climate policies. Adoption shares endogenously affect agents' utility through increasing returns to adoption, learning, and a ‘peak oil’ capacity constraint. We find that peak oil induces a transition to coal rather than renewable energy, which worsens climate change. By introducing climate policies - such as a carbon tax, market adoption or subsidies for renewables, and eliminating existing subsidies for fossil fuels - we identify potential transition patterns to a low-carbon energy system. Model analysis clarifies two main features of climate policies: which ones solve the climate problem, i.e. do not surpass the critical carbon budget; and how uncertain or variable are final market shares of energy sources. |
| `In' analytical Note | Energy Policy , No.136; Jan 2020: p.110907 |
| Journal Source | Energy Policy 2020-01 |
| Key Words | Climate Change ; Energy Policy ; Learning ; Externalities ; Peak Oil |