LOW-CARBON TECHNOLOGIES AND CLIMATE CHANGE MITIGATION POLICY IN AN IMPERFECT WORLD

Abstract

It is widely acknowledged that an important element of climate change mitigation policy will be the development and diffusion of low-carbon technologies. This dissertation uses the Global Change Assessment Model (GCAM), a global integrated assessment model to study the relationships between technology and policy in the context of global climate change mitigation under three "imperfect" circumstances, namely, constraints on the rate of diffusion of low-carbon technologies, countries promoting the deployment of low-carbon technologies based on national priorities and preferences and variation in investment risks across technologies and regions. These conditions deviate from conventional idealized assumptions and thus represent an "imperfect" world. The first essay shows that factors including social, behavioral and institutional that might constrain the rate of diffusion of low-carbon technologies even in the presence of favorable climate policies have sizeable impacts on the costs and feasibility of achieving stringent climate targets. Such impacts are greatly amplified with major delays in serious climate policies. The second essay illustrates the divergence between domestic and global outcomes when countries promote the deployment of specific low-carbon technologies in the near-term. In this essay, I show that a globally cost-effective, near-term international technology investment strategy to achieve a long-term climate goal is a diversified international technology investment portfolio across countries. This essay also explores the degree to which independent national technology deployment policies align with collaboratively determined regimes. I show that conditions exist under which there are substantial gains to international cooperation in the development and deployment of diverse low-carbon technologies but also circumstances in which domestic outcomes align with the global outcome. The third essay focuses on the variation of investment risks across technologies and regions in the electricity generation sector. I find that by taking into account such variation, achieving an emissions mitigation goal is up to 40% higher than it would be in a world with uniform investment risks. Additionally, industrialized countries mitigate more and developing countries mitigate less. The three essays together underscore the importance of policies aimed at developing capabilities and fostering international cooperation in the development and diffusion of low-carbon technologies to achieve climate change mitigation cost-effectively.