why does the combination of the european union emissions trading scheme and a renewable energy target makes economic sense abstract the european climate and energy mix of targets and policies has been criticised by many economists in particular it is often argued that the renewable energy targets do not make economic sense because they represent an expensive option to reduce co2 emissions within a cap and trade scheme such as the european union emissions trading scheme eu ets in addition it has also been claimed that support for renewable electricity deployment negatively interacts with the eu ets having a dampening effect on the co2 price which favours the dirtiest technologies and is detrimental for the greener ones in this article we argue that this mainstream economic view is short sighted and that a multidisciplinary economic analysis of the climate and energy policy mix is required mainstream economic analysis is based on a narrow approach for the assessment of instrument combinations and neglects relevant insights from several economic disciplines including innovation economics and political economy approaches in reality economic theory supports the combination of an ets and renewable energy targets the existence of different policy goals and market failures the demand pull influence of renewable energy policies on innovation a political economy approach and the different risk exposure of renewable energy technologies call for a policy mix although policy combinations are not a panacea and bring problems on their own the aforementioned negative interaction between renewable energy deployment and the carbon price in the eu ets can be mitigated through appropriate coordination and or instrument choice and design

fuel taxes an important instrument for climate policy abstract this article shows that fuel taxes serve a very important role for the environment and that we risk a backlash of increased emissions if they are abolished fuel taxes have restrained growth in fuel demand and associated carbon emissions although fuel demand is large and growing our analysis shows that it would have been much higher in the absence of domestic fuel taxes people often assert that fuel demand is inelastic but there is strong research evidence showing the opposite the price elasticity is in fact quite high but only in the long run in the short run it may be quite inelastic which has important implications for policy makers had europe not followed a policy of high fuel taxation but had low us taxes then fuel demand would have been twice as large hypothetical transport demand in the whole oecd area is calculated for various tax scenarios and the results show that fuel taxes are the single most powerful climate policy instrument implemented to date yet this fact is not usually given due attention in the debate

constructing post carbon institutions assessing eu carbon reduction efforts through an institutional risk governance approach this paper examines three different governance approaches the european union eu and member states ms are relying on to reach a low carbon economy by 2050 current governance literature explains the operational methods of the eu s new governance approach to reduce carbon emissions however the literature neglects to account for the perceived risks that inhibit the roll out of new low carbon technology this article through a novel approach uses a grounded theoretical framework to reframe traditional risk literature and provides a connection to governance literature in order to assess the ability of eu governance mechanisms to reduce carbon emissions the empirical research is based on responses from european energy stakeholders who participated in a delphi method discussion and in semi structured interviews these identified three essential requirements for carbon emissions to be reduced to near zero by 2050 1 an integrated european energy network 2 carbon pricing and 3 demand reduction these features correspond to institutionalized responses by the eu and ms the agency for the cooperation of energy regulators acer european union emission trading scheme eu ets and energy efficiency directives and policies integrated into existing ms institutions the theoretical and empirical findings suggest that governance by facilitation energy efficiency fails to induce significant investment and new policy approaches and cannot be relied on to achieve requisite reductions in demand governance by negotiation acer and governance by hierarchy eu ets do reduce risks and may encourage the necessary technological uptake the term risk governance is used to explain the important role governance plays in reducing risks and advancing new technology and thereby lowering carbon emissions in the energy sector

installed base and compatibility innovation product preannouncements and predation a good is often more valuable to any user the more others use compatible goods the authors show that this effect may inhibit innovation if an installed base exists and transition to a new standard must be gradual early adopters bear a disproportionate share of transient incompatibility costs this can produce excess inertia the installed base however is stranded if the new standard is adopted this may create excess momentum these dynamic effects have strategic implications temporary price cutting can permanently prevent entry and product preannouncements can be critical in innovation these strategic actions have ambiguous welfare effects

the innovation potential of new infrastructure development an empirical study of heathrow airport s t5 project abstract we propose a conceptual framework to analyze technology adoption in mega infrastructure projects and assess their potential to innovating large socio technical systems drawing on an in depth empirical analysis of heathrow airport s terminal 5 project we find that innovation hinges on technology adoption decisions that are governed systematically by two intertwined determinants assessment of expected profitability and development of absorptive capacity both of which are distributed across various interdependent actors on an ad hoc basis technological decisions are also affected by other factors namely attitudes toward risk politics and lack of established standards we reveal how a schedule driven project framing creates an underlying boundary condition that constrains the longitudinal process of building a whole collective with capacity to absorb new technologies the innovation potential of mega projects is thus subjected to a fundamental unifying tension on the one hand they offer a one off opportunity to invest in cutting edge technologies and innovate socio technical systems on the other hand project stakeholders have limited time to develop capacity to absorb novel technologies and negotiate differences on assessments of profitability and risk stakeholders may therefore be compelled to agree to adopt proven technologies upfront to reduce uncertainty and mitigate risks thus limiting the innovation potential of new infrastructure development

normal markets market imperfections and energy efficiency abstract the conventional distinction between economic and engineering approaches to energy analysis obscures key methodological issues concerning the measurement of the costs and benefits of policies to promote the adoption of energy efficient technologies the engineering approach is in fact based upon firm economic foundations the principle of lifecycle cost minimization that arises directly from the theory of rational investment thus evidence that so called market barriers impede the adoption of cost effective energy efficient technologies implies the existence of market failures as defined in the context of microeconomic theory problems of imperfect information and bounded rationality on the part of consumers for example may lead real world outcomes to deviate from the dictates of efficient resource allocation a widely held contrary view that the engineering view lacks economic justification is based on the fallacy that markets are normally efficient

the sources of divergent practices in china s nuclear power sector abstract unlike markets that were early developers of reactors which are dominated by single technologies china s nuclear power sector adopts and imports multiple technologies even after the chinese government introduced a policy to develop a standardized unified and technologically advanced nuclear power sector in the early 2000s different technologies continue to be imported this study uses an institutional lens to explore the decoupling of policy intentions and implementation the three phases of nuclear technology imports that occurred between the 1980s and 2010 are examined and compared data are collected from multiple sources including the diary of a major decision maker news articles project websites a regulation database domestic journal articles and interviews with industry experts using interactive content analysis this study identifies the multiple policy principles and goals of different domains that led to different import arrangements and interpretations of the available foreign technology new arrangements do not replace but overlap the existing ones that are perpetuated by the actors who benefit from them the results show that the multiplicity of china s nuclear power sector coupled with the government s late attempts at standardization contributes to diversified policy implementation they provide important policy implications for the sustainable development of the sector

entrapment in large technology systems institutional commitment and power relations abstract large technology systems cannot be developed without social commitments usually including legal especially in the form of contracts organisational involving producers users and financiers and political involving various actors associated with the state commitments without such commitments there can be no innovation and no investment given the high risks that are entailed however embedded commitments can create inertia causing inferior technologies and technology paths to survive long after they should have been abandoned this form of technological lock in may be reinforced when there are close relations between producers and states which prevent markets and democratic processes from operating effectively these phenomena are illustrated through study of the thermal oxide reprocessing plant thorp a nuclear reprocessing plant in the uk the lesson for technology policy is that much more attention needs to be given to the maintenance of reversibility and adaptability in infrastructural development

innovation policy for directing technical change in the power sector this paper discusses policy instruments for redirecting technical change within the electricity sector to mitigate climate change first we unravel the mechanism behind directed technical change explaining why markets may underprovide innovations in expensive renewable technologies in comparison to innovations in energy efficient fossil fuel generators subsequently we characterize technical change in electricity generation technologies stressing the heterogeneity of knowledge spillovers both within and between clean electricity generation technologies we argue that there exists a rationale for a portfolio approach to innovation in the electricity sector i e optimal innovation policies are neither fully generic nor fully specific and they need to be adapted in response to new information learned by the government the existing innovation literature does not however provide a clear cut answer for designing such a policy we compare policy instruments and argue that public r d support to clean technologies either in the form of subsidies or prizes seems to be the prime candidate for implementing non generic innovation policy

the governance of sustainable socio technical transitions a quasi evolutionary model of socio technical transitions is described in which regimes face selection pressures continuously differentiated transition contexts determine the form and direction of regime change in response to these pressures the articulation of pressures and the degree to which responses are coordinated and based on resources available within the regime define the transition context four alternative contexts are described endogenous renewal re orientation of trajectories emergent transformation and purposive transitions agency and power in the governance of regime transformation are analysed power to affect change depends on regime membership the distribution of resources for change and expectations

the efficiency paradox bureaucratic and organizational barriers to profitable energy saving investments abstract the paradox of why profitable energy saving investments are not undertaken continues to provoke debate the underlying phenomenon might be called the efficiency paradox because it represents a case in which business firms which are often presumed or taken axiomatically to be economically efficient make decisions that do not maximize profits new data from one of the us environmental protection agency s voluntary pollution prevention programs enables this paradox to be explored statistically the data show that both the level and variation in returns to lighting upgrade investments cannot be explained by standard economic models substantial gains in energy efficiency can be achieved without sacrificing profitability both economic and organizational factors account for some of the variation in observed returns to these investments but the results suggest a need for improved and more comprehensive theories of the investment behavior of firms and other organizations

uncertainties in future energy demand in uk residential heating fossil fuels are the main source of space heating in the uk and therefore climate mitigation implies a systemic change in space heating systems the challenge is difficult because of an inefficient building stock and high penetration of natural gas we present new quantified scenarios for residential energy use in the uk to 2050 with minimal policy intervention the uk will remain locked into a gas based heating system which would conflict with the policy goal of decarbonisation however there is a range of scenarios in which this is avoided a system heavily reliant on heat pumps powered by low carbon electricity is uk policy makers currently preferred alternative we conclude that some shift in this direction is likely to be required but complete reliance on this solution raises a number of problems greater use of energy efficiency and biomass can also play a significant role these options have different risks but a more diversified strategy would be more prudent we conclude that the future of uk residential space heating is very uncertain but meeting low carbon heating goals is better conceptualised as reducing reliance on gas rather than necessarily mass electrification our analysis has implications for any country with high use of fossil fuels in space heating and ambitious decarbonisation goals

a dynamic analysis of interfuel substitution for swedish heating plants abstract this paper estimates a dynamic model of interfuel substitution for swedish heating plants we use the cost share linear logit model developed by considine and mount considine t j mount t d 1984 the use of linear logit models for dynamic input demand systems review of economics and statistics 66 434 443 all estimated own price elasticities are negative and all cross price elasticities are positive the estimated dynamic adjustment rate parameter is small however increasing with the size of the plant and time indicating fast adjustments in the fuel mix when changing relative fuel prices the estimated model is used to illustrate the effects of two different policy changes

understanding carbon lock in abstract this paper narrative argues that industrial economies have been locked into fossil fuel based energy systems through a process of technological and institutional co evolution driven by path dependent increasing returns to scale it is asserted that this condition termed carbon lock in creates persistent market and policy failures that can inhibit the diffusion of carbon saving technologies despite their apparent environmental and economic advantages the notion of a techno institutional complex is introduced to capture the idea that lock in occurs through combined interactions among technological systems and governing institutions while carbon lock in provides a conceptual basis for understanding macro level barriers to the diffusion of carbon saving technologies it also generates questions for standard economic modeling approaches that abstract away technological and institutional evolution in their elaboration the question of escaping carbon lock in is left for a future paper

the need for policy to address the food system lock in a case study of the finnish context abstract the introduction of synthetic fertilizers transformed the food system into the one we know today in the western world the present paper argues that this transformation has become an irreversible self feeding process referred to as food system lock in which threatens planetary boundaries of nitrogen and phosphorus hence the food security in the future a system in a lock in state can undermine its own existence by deteriorating the capacity to cope with upcoming crises of resource scarcity and environmental instability in this paper the roots of lock in are explored and empirically grounded in the historical narrative of the food system transition in finland in the past 60 years the theoretical framework builds on socio technical studies and the economic theory of increasing returns the aim of the paper is to identify through an evolutionary analysis the processes of increasing returns that have become path inefficient and have reinforced the lock in in the food system three separate but interdependent processes in the production in the policy and institutions and in the supply chain create systematic resistance towards sustainability transition these findings indicate that more attention should be paid at the public policies that are currently too narrow in their scope and do not effectively bridge the entire system from food production to consumption public intervention is critical for the unlocking but individuals in the various parts of the food system are those who create new paths

economic growth fossil fuel and non fossil consumption a pooled mean group analysis using proxies for capital this study employs a pooled mean group estimator to examine the nexus between economic growth and fossil and non fossil fuel consumption for 53 countries between 1990 and 2012 the global sample was divided into four categories developed exporters developed importers developing exporters and developing importers the purpose of these categories was to observe whether factors unique to these countries influence the relationship between energy consumption and economic growth with the exception of developing importers evidence of bi directional causality between fossil fuel consumption and real gdp across all subsamples is observed this leads to the conclusion that efforts to directly conserve fossil fuels may harm economic growth in terms of non fossil fuel use the results are more diverse bi directional causality between non fossil fuel use and real gdp is found in the long and short run for developed importers bi directional causality only in the long run for developed exporters negative long run causality from real gdp to non fossil fuels for developing exporters and long run causality from non fossil fuel use to real gdp for developing importers these results lead to the conclusion that other factors have been responsible for the progress seen in non fossil fuel use thus it is concluded that economic growth on its own is insufficient to promote clean energy development there is a need for policy makers to create an environment conducive to renewable energy investment

governing transitions cases and insights from two periods in the history of the uk gas industry the paper aims to inform historically the analyses of future sociotechnical transition pathways in the electricity sector particularly those developed by the transition pathways to a low carbon economy project it also aims to inform the theoretical approach to transitions by focusing on key decisions at branching points that led to transitions in the uk gas energy services regime which occurred under different governance patterns the first historical case study covers the market led transformation of the manufactured gas regime from 1877 to 1914 which developed the end uses of gas beyond lighting to include cooking and extended access to working class consumers the second case study covers the period from 1948 to 1977 historically reconstructing the transition from town gas to natural gas this state led and coordinated conversion to natural gas was preceded by a period of destabilisation of the manufactured gas regime the co existence of several niche technologies and the hybridisation of the key actors and technological infrastructures of the incumbent regime comparing the cases provides insights for future energy service transitions by addressing the significance of power trust and networking in the decision making processes involved in the governance of energy transitions

globalizing carbon lock in this paper extends the arguments surrounding carbon lock in elaborated in unruh energy policy 28 2000 817 30 2002 317 to countries currently undergoing industrialization it argues that for numerous reasons industrializing countries are unlikely to leapfrog carbon intensive energy development on the contrary carbon lock in may be globalizing and could further constrain climate change mitigation options it is then argued that many policy recommendations ignore carbon lock in possibly limiting their potential for successful implementation the paper then discusses four policy approaches that appear to have advantages given lock in conditions it is recognized however that relative ease of implementation does not necessarily equate with superiority instead it is merely a path dependent outcome of past development decisions pursuing policies on the basis of relative implementation ease may help address the issue of climate change but could also result in sub optimal outcomes along other dimensions of sustainable development

barriers to energy end use efficiency abstract recent findings indicate that some alternative energy promote equity efficiency and self reliance and are both economical and sustainable the asian development bank therefore initiated a case study to formulate energy strategies which could contribute to the solution of both local and global energy problems the study focuses on technical and economic details of energy end uses in india the conclusions some of which are surprising are supported by data from several studies the study recommends a shift to least cost electricity planning improving the available database for and information availability about energy rationalizing energy pricing and related fiscal policies and achieving energy efficiency by judicious investment in and support of energy forms which will be both sustainable and affordable in the long run

the kilometer tax and swedish industry effects on sectors and regions an introduction of a kilometer tax for heavy goods vehicles can be constrained by the risk of that higher production costs than competitors in other countries will negatively affect regions and industries of policy concern we estimate factor demand elasticities in the swedish manufacturing industry using firm level data for the 1990 to 2001 period on input prices and quantities the results show that the introduction of a kilometer tax for heavy goods vehicles decreases transport demand and increases labour demand the effects are less pronounced in terms of changes in output though some industries e g wood pulp and paper can be expected to be affected more than others due to their dependence on road freight transport the regional dimension regarding the consequences of a kilometer tax seems to be small or even nonexisting

towards alternative trajectories reconfigurations in the dutch electricity regime abstract in the early 2000s dutch electricity companies are increasingly investing in technologies that enable them to replace coal with biomass replacing large amounts of coal up to 40 requires the companies to invest in technological trajectories alternative to the ones they have supported over the past decades this paper aims to understand why these incumbent firms in the dutch electricity regime are developing alternatives the second aim of the paper is to provide a way for assessing the potential of innovations the paper does so by bringing together insights from literature on socio technical regimes and insights from literature on technological and market niches strategic niche management the main conclusion is that both niche processes at the level of experimenting with alternatives and changes in the incumbent regime are necessary for understanding the innovation journey of a new technology a two by two matrix is developed that can be used for both analysis and governance purposes

the costs of mitigating carbon emissions a review of methods and findings from european studies abstract conventional wisdom has it that top down studies of mitigation costs are too pessimistic while bottom up studies are too optimistic in examining mitigation cost studies for western europe this paper finds this interpretation to be flawed the paper expands the analytical framework for interpreting mitigation cost studies evaluates the treatment of no regrets options and other input assumptions in the various studies and includes findings from recent integrated top down bottom up modeling assessments not covered in the ipcc report based on these new elements it is found that mitigation costs tend to be overestimated not only in top down studies but also in bottom up studies given this pervasive bias toward pessimism the body of existing mitigation cost assessments for western europe can be read as follows over the next three to four decades a combination of tax shifts market transformation instruments and policies to reform subsidies and internalize non climatic externalities could cut carbon emissions in western europe by 40 50 relative to the base year at no loss or at a gain in gdp averaged over the medium term and including a phase in period an economically optimal rate of implementing western europe s no regrets potentials is found to be in the neighborhood of 2 per year relative to base year levels

innovation processes in large technical systems market liberalization as a driver for radical change abstract electricity supply is a large technical system which exhibits strong path dependencies and high barriers for radical innovations recent market liberalization however has initiated a fundamental restructuring the paper analyzes how liberalization has altered innovation processes in the field of electricity supply we examine three radical innovations under monopoly conditions and contrast the findings with the results from a survey on the innovation behavior of electric utilities in liberalized markets we argue that the selection environment for innovations has changed in various respects in our sample new options open to innovation activities have emerged at the level of the firm and utility strategies turn out to be more heterogeneous this may be interpreted as an increase in the variety of search processes which may lead to a mid term decrease of path dependencies

disordering fantasies of coal and technology carbon capture and storage in australia abstract one of the main ways that continued use of coal is justified and compensated for is through fantasies of technology this paper explores the politics of carbon capture and storage ccs technologies in australia these technologies involve capturing co2 emissions usually to store them safely underground in a process called geo sequestration in australia the idea of clean coal has been heavily promoted and is a major part of co2 emissions reduction plans despite the technological difficulties the lack of large scale working prototypes the lack of coal company investment in such research and the current difficulties in detecting leaks this paper investigates the ways that the politics of clean coal have functioned as psycho social defence mechanisms to prolong coal usage assuage political discomfort and anxiety and increase the systemic disturbance produced by coal power

heavy duty gas turbines in iran india and china do national energy policies drive the industries this paper for the first time systematically examines the heavydutygasturbine hdgt industry in the context of developing countries it provides a comparative analysis of the hdgt industries in iran india and china it contrasts their national strategies the historical development of their technological capabilities the similarities and differences in approach the varying evolutionary paths and policy drivers and the reasons for their differing outcomes this paper argues that a high level of state involvement is a prominent feature of hdgt industries in developing countries it also argues that the development and evolution of the hdgt industries in these countries is closely interrelated with the countries national energy policies it clarifies why such an advanced and sophisticated industry is a strategic choice in one country while it is seen as an inferior choice in another

not irrational but habitual the importance of behavioural lock in in energy consumption abstract a substantial body of literature has shown that our behaviour is often guided by habits the existence of habits not fully conscious forms of behaviour is important as it contradicts rational choice theory their presence thus calls for the setting of new instruments as they make it unlikely that consumers be capable of exercising control over their energy consumption in reaction to given incentives this is further increased in the evolutionary perspective where the current carbon based socio technical system constrains and shapes consumers choices through structural forces habits being potentially counterintentional they may explain the efficiency paradox in energy as well as the continued increase of energy consumption despite the rising environmental awareness among the population policies aiming at reducing energy consumption should thus specifically address the performance context of habits for instance targeting new residents has proven to be more effective given that their preceding habits have been disturbed the results of our empirical analysis confirm this idea by showing how a change of context makes people more receptive to a proposed measure our analysis of the role played by habits also suggests that individuals do not consider the need to change existing habits as an obstacle even though this is contradicted implicitly in the answers they provided to open questions this unconsciousness is one of the most delicate features of habits and it should thus be accounted for when designing measures given the other characteristics of habits the joint use of feedbacks and commitment strategies appears promising

escaping carbon lock in this article explores the climate policy implications of the arguments made in understanding carbon lock in unruh 2000 which posited that industrial countries have become locked into fossil fuel based energy systems through path dependent processes driven by increasing returns to scale carbon lock in arises through technological organizational social and institutional co evolution culminating in what was termed as techno institutional complex tic in order to resolve the climate problem an escape from the lock in condition is required however due to the self referential nature of tic escape conditions are unlikely to be generated internally and it is argued here that exogenous forces are probably required

barriers within firms to energy efficient investments abstract many investments in energy efficiency fail to be made despite their apparent profitability internal hurdle rates are often set at levels higher than the cost of capital to the firm reasons for these practices include bounded rationality principal agent problems and moral hazard the policy implication is that government can simultaneously improve overall energy efficiency and increase private sector productivity by providing informational and organizational services that go beyond the traditional regulatory framework

an analysis of spain s global and environmental efficiency from a european union perspective abstract sustainable economic growth from the environmental point of view is one of the commitments of the eu 28 different measures have been implemented to deal with this issue this work analyses spain s natural efficiency and management efficiency in their static and dynamic sense for the years 2005 2012 in comparison eu 28 the analysis has been carried out using the malmquist index and natural and managerial efficiency three variables have been considered as inputs work gross fixed capital formation and final energy consumption two variables are the outputs the gdp as a desirable output and greenhouse effect gas emissions as an undesirable output the result is that spain s managerial efficiency and natural efficiency are though their values are lower evolving in a similar manner to those of the countries which have been at the heart of the eu longer these levels of efficiency are higher than those of the block of countries which have joined the eu 28 more recently the natural malmquist index results indicate that these are the countries which have had a greater growth in productivity above spain s and the average of the more veteran countries

transition to a post carbon society linking environmental justice and just transition discourses abstract the hunter valley in new south wales australia is a globally significant coal mining and exporting region the hunter economy s strong basis in fossil fuel production and consumption is challenged by civil society campaigns employing environmental justice discourses this paper analyses how two civil society campaigns in the hunter region stop t4 and groundswell have countered the regional hegemony of fossil fuel interests from an environmental justice perspective however the discursive dominance of the jobs versus environment frame hinders efforts to build solidarity amongst local environmental justice goals on the one hand and workers and union aspirations for secure quality jobs on the other long term structural decline of global coal markets adds pressure for economic transition we argue that campaigns to open up possibilities for transition away from fossil fuel dependency to a post carbon society can be strengthened by engaging with the just transition discourses that are typically associated with organised labour doing so can create synergy for social change by aligning community and labour movement interests inclusive social movement partnerships around this synergy must address structural disadvantage that creates social and economic insecurity if communities are to prevail over the fossil fuel sector s hegemony

technology adoption in the presence of network externalities we analyze technology adoption in industries where network externalities are significant the pattern of adoption depends on whether technologies are sponsored a sponsor is an entity that has property rights to the technology and hence is willing to make investments to promote it key findings include the following 1 compatibility tends to be undersupplied by the market but excessive standardization can occur 2 in the absence of sponsors the technology superior today has a strategic advantage and is likely to dominate the market 3 when one of two rival technologies is sponsored that technology has a strategic advantage and may be adopted even if it is inferior 4 when two competing technologies both are sponsored the technology that will be superior tomorrow has a strategic advantage

niche accumulation and hybridisation strategies in transition processes towards a sustainable energy system an assessment of differences and pitfalls this paper assesses two patterns in transition processes for using them as strategies towards a sustainable energy system i e niche accumulation and hybridisation both play important but different roles in transitions the expected success of these strategies depends on the innovation s history and the innovation context the different strategies are illustrated with several examples from the energy domain

the economics of changing course implications of adaptability and inertia for optimal climate policy this paper reviews evidence that energy technologies and systems adapt over time to accommodate external pressures that technical innovation and systemic change in the energy sector is largely induced by need and restrained by potentially large transitional costs a simple integrated model of optimal greenhouse gas abatement over time is presented in which the abatement cost depends on both fixed and transitional elements it is shown that the optimal current response and long run prospects differ radically between the classical economic case in which the cost of a given cutback in emissions is fixed exogenously and the adaptive case in which the response is ultimately adaptive but heavily constrained by inertia ie low fixed but high transitional cost if energy systems are indeed to a large degree adaptive the results demonstrate that as compared with the classical non adaptive case long run stabilization of atmospheric co2 may be optimal even with moderate damages from climate change greater near term abatement efforts are justified and the cost of a given delay in response may be several times higher neglect of the issue of induced technical change and other adaptive responses may invalidate the policy implications drawn from most integrated assessment models developed to date

green electricity in the market place the policy challenge the paper explores the implications of the liberalization of electricity markets in europe and north america for policy means and mechanisms to enhance the market penetration of renewables applying a co evolutionary approach the argument highlights the need for policy intervention to help producers and consumers move out of technological trajectories favoring non renewable electricity on the production side energy generation is locked into the central power station system deriving from more than a hundred years of technological development along a specific system trajectory on the consumption side the locked in effect results from a similarly long experience with electricity provision by monopoly suppliers and the associated lack of consumer choice and responsibility for product differentiation as the analysis shows policy strategies targeting both the production and consumption sides of the electricity market are needed for effective intervention furthermore policy strategies should draw on a clear analysis of the inertia and dynamism underlying the production and consumption of electricity in the light of such evolutionary dynamics the analysis demonstrates the insufficiency of the policy approaches currently employed to foster the market share of renewables based electricity instead the authors suggest a reflexive policy approach to initiate and support a reorientation towards green electricity emphasizing the need for learning and communication between and among societal actors

market opening and third party access in district heating networks the purpose of this paper is to analyse the possible effects of introducing tpa in district heating networks by identifying and scrutinizing a number of possible scenarios for increased competition the analysis builds on a theoretical discussion of economic efficiency in district heating operations and the possible impacts on consumer prices of a market opening an important conclusion is that regulated tpa may have small positive effects on competition and at the same time it can have a negative impact on the possibility to run the integrated district heating operations in a cost effective manner this conclusion stems in part from the observation that most district heating networks are local in scope moreover district heating operations are highly interdependent in for instance that the level of the return temperature of the water will affect the efficiency of combined heat and power plants for these reasons the introduction of the so called single buyer model or perhaps even more preferable an extended and more transparent producer market could represent more efficient market designs moreover in networks with clear natural monopoly characteristics an ex ante price regulation must be considered

getting round the lock in in electricity generating systems the example of the gas turbine abstract the purpose of this paper is to show how in a situation of lock in in the environment of electricity generation a new technology can succeed in overcoming this situation and become competitive our study will show that it is possible to get round the lock in by bringing into play the increasing returns of adoption in particular production niches where the existence of powerful constraints of techno economic consistency leads to a path of increasing specification then a hybridization of the competing technologies will allow the new technology to emerge from the original niche and take advantage of the increasing returns of adoption which were hitherto the reserve of the former technology we shall then draw lessons from the example of the gas turbine in comparison with the basic model of b arthur

biological technology and agricultural policy an assessment of azolla in philippine rice production concerns about external debt and energy security have motivated several developing countries to develop biological technologies to substitute for petrochemical inputs this paper examines the economic feasibility of azolla as a source of nitrogen in philippine rice production green manuring with azolla is found not to be cost effective substantial savings from intercropping with azolla can be realized only if the cost of nitrogen from azolla is compared with the price of nitrogen from ammonium sulfate but not if urea is used as the basis of comparison farmers would benefit more from liberalization of import controls on urea additional research is needed to develop appropriate chemical saving systems before investing heavily in extension

biotechnology for rural nutrition abstract this article evaluates the introduction of algal biotechnology as a nutrition intervention in rural south india in terms of its benefits costs and acceptability to the tastes and income of rural households data were collected from a whole village study and developments in the theory of the economics of tastes are used to analyse the socioeconomic acceptance of algal supplements among the study households the results indicate that the algal food supplement is highly cost effective in providing adequate protein and other micronutrients however the absolute deviation between actual and optimal intake of algal food increased with higher income class several policy implications for food and nutrition interventions in developing countries are derived

sensitivity of price elasticity of demand to aggregation unobserved heterogeneity price trends and price endogeneity evidence from u s data abstract price elasticity estimates of residential electricity demand vary widely across the energy economics and policy literature in this paper we seek to explain these findings using three nationwide datasets from the u s the american housing survey forms eia 861 and the residential energy consumption survey we examine the role of the sample period level of aggregation use of panel data use of instrumental variables and inclusion of housing characteristics and capital stock our findings suggest that price elasticities have remained relatively constant over time upon splitting our panel datasets into annual cross sections we do observe a negative relationship between price elasticities and the average price whether prices are rising or falling appears to have little effect on our estimates we also find that aggregating our data can result in both higher and lower price elasticity estimates depending on the dataset used and that controlling for unit level fixed effects with panel data generally results in more inelastic demand functions addressing the endogeneity of price and or measurement error in price with instrumental variables has a small but noticeable effect on the price elasticities finally controlling for housing characteristics and capital stock produces a lower price elasticity

competing technologies and market dominance standard battles in the local area networking industry the rise of fast ethernet as the dominant standard for high speed connection in the local area networking industry is chosen to study the interaction between increasing returns to adoption and technical change in innovation diffusion contrary to most of the empirical papers on diffusion with increasing returns which study competition between an entrenched technology and a new competitor the focus is on the case in which several and different versions of a new technology are competing at the same time for market dominance within this context this article studies under which conditions an early technology may fail to capitalise on its initial time advantage and a new version without a clear early lead may become dominant in particular we will consider a case in which the initial time advantage is made ineffective by consistently adverse technological expectations then we analyse how the arrival on the market of different categories of buyers sensitive to specific applications further contribute to weaken the early leader and strengthen a competing version this is more likely to occur when buyers are highly familiar with the characteristics of that specific version copyright 2008 oxford university press

simulating the impacts of credit policy and fertilizer subsidy on central luzon rice farms the philippines the effects of credit policy and fertilizer subsidy on farmers input choices production and income are examined with a multiseason decision making model stochastic production technology risk neutral and risk averse decision rules short term savings consumption behavior and a dual financial market are considered results indicate the risk neutral rule is more consistent with actual choices than risk averse rules estimated yields increased 21 to 30 from joint credit and fertilizer subsidies benefits are greater on irrigated than on rainfed farms a substantial default rate in the institutional market reduces credit program benefits

integrative re use systems as innovative business models for devising sustainable product service systems re use implies recovering items from the waste stream to use them in identical or similar processes mostly at consumer level currently re use is restricted to niches but by 2020 the european commission wants to mainstream re use as a waste management option to increase resource efficiency ecologically oriented work integration social enterprises focussing on re use re use eco wises might help accomplish as they not only intend to re integrate marginalised people into the labour market but provide comprehensive re use services e g repair and thus constitute a novel kind of sustainable product service system spss this paper contributes to a scientific framework for re use eco wises by linking existing theoretical knowledge on spss to novel knowledge from three cases representing the variety of re use eco wises in austria for analysis we use the so called business model canvas adding a comprehensive stakeholder consideration results show that re use eco wises contribute to all three dimensions of sustainability by helping reduce waste and increasing resource productivity and by providing jobs and affordable goods for disadvantaged people full implementation however will need additional efforts from all stakeholders involved including the eco wises themselves but also public authorities and society at large

recent evolutionary theorizing about economic change this famous passage from marshall s principles of economics it first appeared in the fifth edition which came out in 1907 nicely brings out two issues which are as germane to economics today as they were when marshall wrote the first is the heavy reliance by economists in their formal theorizing on the notion of equilibrium the other is the appeal that biological conceptions3x201d have for many economists particularly when their focus is on economic change

economic history and the modern economist in this book nine economists and economic historians express their concern for the present state of economics and its development in the future from a variety of different approaches these scholars reassert the importance of economic history in the training of economists and urge that this perspective should not be lost in the future

the patchy spread of renewables a socio territorial perspective on the energy transition process abstract in the energy transition process the district heating networks and the wind power facilities play a key role these two technologies can contribute to establish models of co provision involving new social actors in the energy field despite that the socio organizational change appears patchy in italy these options are dominated by large utilities and the few forms of energy co production are to be found in specific contexts the influence of socio territorial features on the energy transition seem relevant this paper aims analysing energy transition while focusing on the institutional relational and territorial dimensions to unfold how energy innovations take place within territorial contexts in this respect energy transition is investigated considering both the district heating and the wind power in italy the analysis suggests that the transition is influenced by the way in which territorial context is destabilized by the perturbations of energy landscape

the socio technical transition of distributed electricity storage into future networks system value and stakeholder views whole system models for the gb electricity system suggest that distributed electricity storage has the potential to significantly reduce the system integration cost for future system scenarios from a policy perspective this poses the question why this value should not be realised within existing market structures opinion among stakeholders is divided some believe that storage deployment constitutes a special case in need of policy support others insist that markets can provide the necessary platform to negotiate contracts which reward storage operators for the range of services they could provide this paper seeks to inform this debate with a process of stakeholder engagement using a perspective informed by socio technical transition literatures this approach allows the identification of tensions among actors in the electricity system and of possibilities for co evolution in the deployment of storage technologies during a transition towards a low carbon electricity system it also draws attention to policy related challenges of technology lock in and path dependency resulting from poor alignment of incumbent regimes with the requirements for distributed electricity storage

the two faces of market support how deployment policies affect technological exploration and exploitation in the solar photovoltaic industry the recent years have seen a strong rise in policies aiming to increase the diffusion of clean energy technologies while there is general agreement that such deployment policies have been very effective in bringing technologies to the market it is less understood how these policies affect technological innovation to shed more light on this important question we conducted comparative case studies with a global sample of 9 firms producing solar photovoltaic pv modules complemented by in depth interviews with 16 leading pv industry experts we propose that on the one hand policy induced market growth serves as an important catalyst for innovative activity as it raises the absolute level of firm investments in technological exploration on the other hand however deployment policies create an incentive for firms pursuing more mature technologies to shift their balance between exploitation and exploration toward exploitation firms focusing on less mature technologies cannot tap the potentials of exploitative learning to the same extent as those with more mature technologies therefore stimulating strong market growth may raise the barrier to market entry for less mature technologies we conclude that when designing deployment policies great care should be taken to avoid adverse effects on technological diversity and a premature lock in into more established technologies

bad eggs learning by doing and the choice of technology we model long run economic development through technology adoption under scientific uncertainty about environmental effects there are four possible long run equilibria in a socially planned economy high growth adopt rapidly but abandon damaging technologies once revealed ddt cfcs cautious brake the introduction of new technologies to avoid mistakes genetically modified organisms no growth halt technological progress to preserve secondary knowledge and collapse adopt rapidly without ever abandoning damaging technologies in the base parameterization a short sighted social planner chooses the cautious strategy a far sighted planner chooses the high growth strategy unless damages are irreversible in which case the cautious strategy again dominates regulatory options in the market economy are investigated pollution taxes do not affect the firm s level of precaution if they can only be applied after the adopting firm has reaped the benefits however they do encourage the abandonment of damaging technologies liability rules do affect precaution but may lead to excessive caution or even a no growth trap

accounting for behavioral effects of increases in the carbon dioxide co2 tax in revenue estimation in sweden in this paper we describe how behavioral responses of carbon dioxide co 2 tax increases are accounted for in tax revenue estimation in sweden the rationale for developing a method for this is a