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The dynamics of technology diffusion and the impacts of climate policy instruments in the decarbonisation of the global electricity sector

Mercure, J. F.; Pollitt, H.; Chepreecha, U.; Salas, P.; Foley, A. M.; Holden, P. B. and Edwards, N. R. (2014). The dynamics of technology diffusion and the impacts of climate policy instruments in the decarbonisation of the global electricity sector. Energy Policy, 73 pp. 686–700.

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DOI (Digital Object Identifier) Link: https://doi.org/10.1016/j.enpol.2014.06.029
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Abstract

This paper presents an analysis of climate policy instruments for the decarbonisation of the global electricity sector in a non-equilibrium economic and technology diffusion perspective. Energy markets are driven by innovation, path-dependent technology choices and diffusion. However, conventional optimisation models lack detail on these aspects and have limited ability to address the effectiveness of policy interventions because they do not represent decision-making. As a result, known effects of technology lock-ins are liable to be underestimated. In contrast, our approach places investor decision- making at the core of the analysis and investigates how it drives the diffusion of low-carbon technology in a highly disaggregated, hybrid, global macroeconometric model, FTT:Power-E3MG. Ten scenarios to 2050 of the electricity sector in 21 regions exploring combinations of electricity policy instruments are analysed, including their climate impacts. We show that in a diffusion and path-dependent perspective, the impact of combinations of policies does not correspond to the sum of impacts of individual instruments: synergies exist between policy tools. We argue that the carbon price required to break the current fossil technology lock-in can be much lower when combined with other policies, and that a 90% decarbonisation of the electricity sector by 2050 is affordable without early scrapping.

Item Type: Journal Item
Copyright Holders: 2014 The Authors
ISSN: 0301-4215
Project Funding Details:
Funded Project NameProject IDFunding Body
ERMITAGE265170EU FP7
Extra Information: climate policy; emissions reductions pathways; climate change mitigation; energy systems modelling
Academic Unit/School: Faculty of Science, Technology, Engineering and Mathematics (STEM) > Environment, Earth and Ecosystem Sciences
Faculty of Science, Technology, Engineering and Mathematics (STEM)
Research Group: International Development & Inclusive Innovation
Item ID: 40559
Depositing User: Philip Holden
Date Deposited: 17 Jul 2014 08:08
Last Modified: 03 Jun 2019 18:22
URI: http://oro.open.ac.uk/id/eprint/40559
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