Large scale scenario analysis of future low carbon energy options

In this study, we use a multi-model framework to examine a set of possible future energy scenarios resulting from R&D investments in Solar, Nuclear, Carbon Capture and Storage (CCS), Bio-fuels, Bio-electricity, and Batteries for Electric Transportation. Based on a global scenario analysis, we examine the impact on the economy of advancement in energy technologies, considering both individual technologies and the interactions between pairs of technologies, with a focus on the role of uncertainty. Nuclear and CCS have the most impact on abatement costs, with CCS mostly important at high levels of abatement. We show that CCS and Bio-electricity are complements, while most of the other energy technology pairs are substitutes. We also examine for stochastic dominance between R&D portfolios: given the uncertainty in R&D outcomes, we examine which portfolios would be preferred by all decision-makers, regardless of their attitude toward risk. We observe that portfolios with CCS tend to stochastically dominate those without CCS; and portfolios lacking CCS and Nuclear tend to be stochastically dominated by others. We find that the dominance of CCS becomes even stronger as uncertainty in climate damages increases. Finally, we show that there is significant value in carefully choosing a portfolio, as relatively small portfolios can dominate large portfolios.