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Christian Azar Based on joint work with Björn Sandén Chalmers University, Göteborg Sweden

Near-term technology policies for long-term climate targets. Christian Azar Based on joint work with Björn Sandén Chalmers University, Göteborg Sweden http://www.frt.fy.chalmers.se. Department of Physical Resource Theory. Technology change.

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Christian Azar Based on joint work with Björn Sandén Chalmers University, Göteborg Sweden

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  1. Near-term technology policies for long-term climate targets Christian Azar Based on joint work with Björn Sandén Chalmers University, Göteborg Sweden http://www.frt.fy.chalmers.se Department of Physical Resource Theory

  2. Technology change Changing the technologies we pick from the shelf Bringing new technologies to the shelf Department of Physical Resource Theory

  3. Changing the technologies we pick from the shelf (I) District heating in Sweden

  4. Changing the technologies we pick from the shelf (II)

  5. Changing the technologies we pick from the shelf (II)

  6. Changing the technologies we pick from the shelf (III) • Higher price on carbon emissions • Tax, or • Cap and trade, and • Removal of existing subsidies to fossil fuels • Efficiency standards when • energy prices are insignificant, or • markets are not expected to work well

  7. Technology change Changing the technologies we pick from the shelf Bringing new technologies to the shelf Department of Physical Resource Theory

  8. Advanced energy technologies required Results from the GET model. Azar et al, 2005, Climatic Change

  9. Shares of world primary energy supply 1850-2000

  10. Bringing new technologies to the shelf (I) • New advanced technologies required • Price signals and long-term committments required to make this happen… • … but not sufficient because of long time scales • knowledge spill over • Long term future discounted by private actors • Role for government: invest in learning!

  11. Bringing new technologies to the shelf (II):Public R&D funding in OECD on renewable energy Source IEA (2003)

  12. Bringing new technologies to the shelf (III) • R&D is not sufficient. • Valley of death needs to be bridged • Government supported market formation to ensure diffusion that enables learning by doing • Public procurement • Market share requirements (e.g., green certificates, portfolios) • Technology specific support (subsidies)

  13. ”Governments should not pick the winners” – but how? • EU biofuels directive and green certificates • versus • Subsidies

  14. CONCLUSION (I) The important thing with near-term action is not only the actual reductions that are made, but equally important, the extent to which the policy puts us in a position where it is politically feasible to negotiate, adopt and meet even stronger targets for subsequent abatement periods. Our climate policies need not only to be cost-efficient but they must also bring new technologies to the shelf.

  15. CONCLUSION (II) • Price incentives for cost efficient carbon abatement at present (changing the technologies we pick from the shelf). • Technology specific policies to enable future reductions (bringing new technologies to the shelf). • Subsidies warranted only when learning can be expected and the technology is promising.

  16. CONCLUSION (III) Let a hundred flowers bloom strategy Governments should consider the possibility to initiate large-scale programs, individually or jointly, as part of the UNFCCC/Kyoto protocol negotiations to develop the more advanced energy technologies that are required to meet the long-term objective of the UNCCC

  17. CO2-concentration and temperature

  18. Criteria by which near-term policies should be judged • Actual abatement • Development of institutions and mechanisms • Impact on technology development • Impact on actors Department of Physical Resource Theory

  19. Let 2000-2010 the decade of great experiments and failures – tentative list Solar PV Solar thermal electric Solar heat (building integrated as standard) Wind (continued 25%/growth, plus large scale testing of off-shore CO2 sequestration (demonstration plants + storage) Zero energy for heating houses Gasification of biomass and coal for h2, MeOH & DME Ethanol from woody biomass Prepare for the hydrogen future: NG pipelines should be H2 compatible Fuel cells in cars, buses and local CHP Storage technologies Department of Physical Resource Theory

  20. US public R&D expenditures 6000 Renewables 5000 Coal Oil and gas 4000 Nuclear Fusion 3000 Fission 2000 1000 0 1974 1979 1984 1989 1994 1999

  21. Japanese public R&D expenditures

  22. OECD public R&D expenditures on energy

  23. Photovoltaics costs and sales

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