Climate Policy, Uncertainty, and the Role of Technological Innovation
We study how uncertainty about climate change severity affects the relative benefits of early abatement and a portfolio of research and development (R&D) in lowering future abatement costs. Optimal early abatement depends on the curvature of the marginal benefit and marginal abatement cost (MAC) functions and how the uncertain parameter affects marginal benefits.
R&D in a particular technology depends on whether uncertainty increases early abatement; whether investment lowers marginal costs for that technology; whether R&D lowers the slope of that technology's MAC function; and the shape of that technology's MAC function. We illustrate, focusing on the role of backstop technologies.
- Peer reviewed
- EfD Discussion papers
- Discussion papers
- Policy briefs
- EfD/RFF Books
- Research Briefs
- Theses PhD & MSc
- All Publications
Subscribe to our Newsletter service
Join or share
This paper presents the application of an auction scheme for the allocation of funds for [cont...]
Eco-certification can generate private benefits for tourism operators in developing countries and [cont...]