A model is presented in this work for simulating endogenously the evolution of the marginal costs of production of energy carriers from non-renewable resources, their consumption, depletion pathways and timescales. Such marginal costs can be used to simulate the  price formation of energy commodities. Drawing on previous work where a global database of energy resource economic potential was constructed, this work uses cost distributions of non-renewable resources in order to evaluate global flows of energy commodities. A mathematical framework is given to calculate endogenous flows of energy resources given an exogenous commodity price path. This framework can be used in reverse in order to calculate an exogenous marginal cost of production of energy carriers given an exogenous carrier demand. These two approaches generate limiting scenarios that depict extreme use of natural resources.  The theory is however designed for use within economic models and models of technological change such as the Future Technology Transformations (FTT) family of models . In this work, it is implemented in the global power sector model FTT:Power , with which scenarios of global resource use and marginal costs of production of energy commodities are detailed . Policy implications are given.
A model is presented in this work for simulating endogenously the evolution of the marginal costs of production of energy carriers from non-renewable resources, their consumption, depletion pathways and timescales. Such marginal costs can be used to simulate the long term average price formation of energy commodities. Drawing on previous work where a global database of energy resource economic potentials was constructed, this work uses cost distributions of non-renewable resources in order to evaluate global flows of energy commodities. A mathematical framework is given to calculate endogenous flows of energy resources given an exogenous commodity price path. This framework can be used in reverse in order to calculate an exogenous marginal cost of production of energy carriers given an exogenous carrier demand. Using rigid price inelastic assumptions independent of the economy, these two approaches generate limiting scenarios that depict extreme use of natural resources. This is useful to characterise the current state and possible uses of remaining non-renewable resources such as fossil fuels and natural uranium. The theory is however designed for use within economic or technology models that allow technology substitutions . In this work, it is implemented in the global power sector model FTT:Power . Policy implications are given.
A
long term average
R
potential
potentials
R
These
Using rigid price inelastic assumptions independent of the economy, these
A
This is useful to characterise the current state and possible uses of remaining non-renewable resources such as fossil fuels and natural uranium.
R
models and models of technological change such as the Future Technology Transformations (FTT) family of models
or technology models that allow technology substitutions
D
, with which scenarios of global resource use and marginal costs of production of energy commodities are detailed