Keywords: CO2 constraints and entitlements to 2030, costs of meeting CO2 targets, value of technological progress, technological breakthroughs, power generation technologies
World post-Kyoto scenarios: benefits from accelerated technology progress
This paper addresses the issue of the potential benefits from technological change in post Kyoto CO2 emission reduction scenarios. In order to assess these benefits, it is necessary in Section 2 to define CO2 emission entitlements by world region, in a way that allows both for a significant global reduction from the reference in 2030 and for an acceptable burden sharing among world regions. The economic consequences of this entitlement scenario are explored in detail in Section 3, under the hypotheses of on-going trends for technology dynamics and of full world trading for emission permits. Section 4 then introduces the 'Technology Stories', corresponding to hypotheses of breakthroughs in the performances and costs of six distinct power generation technology clusters. The Technology Stories and their impacts on CO2 marginal and total abatement costs are then studied in detail, both at world level and in a regional perspective. One key result of this paper is a quantitative assessment of the significant reductions in the compliance costs that may be expected from improvements in low-carbon generation technologies.