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Improved representation of investment decisions in assessments of CO2 mitigation

Author

Listed:
  • Gokul C. Iyer

    (University of Maryland, School of Public Policy
    Pacific Northwest National Laboratory, Joint Global Change Research Institute)

  • Leon E. Clarke

    (Pacific Northwest National Laboratory, Joint Global Change Research Institute)

  • James A. Edmonds

    (Pacific Northwest National Laboratory, Joint Global Change Research Institute)

  • Brian P. Flannery

    (Resources for the Future)

  • Nathan E. Hultman

    (University of Maryland, School of Public Policy)

  • Haewon C. McJeon

    (Pacific Northwest National Laboratory, Joint Global Change Research Institute)

  • David G. Victor

    (UC San Diego, School of International Relations and Pacific Studies)

Abstract

Assessments of emissions mitigation patterns have largely ignored differences in investment risk across technologies and regions. With a model accounting for such differences in the electricity generation sector, research now finds that mitigation costs are higher than with no risk variation, and highlights the importance of institutional reforms to lower investment risks.

Suggested Citation

  • Gokul C. Iyer & Leon E. Clarke & James A. Edmonds & Brian P. Flannery & Nathan E. Hultman & Haewon C. McJeon & David G. Victor, 2015. "Improved representation of investment decisions in assessments of CO2 mitigation," Nature Climate Change, Nature, vol. 5(5), pages 436-440, May.
    • Handle: RePEc:nat:natcli:v:5:y:2015:i:5:d:10.1038_nclimate2553
    DOI: 10.1038/nclimate2553
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    Cited by:

    1. Iyer, Gokul C. & Clarke, Leon E. & Edmonds, James A. & Hultman, Nathan E. & McJeon, Haewon C., 2015. "Long-term payoffs of near-term low-carbon deployment policies," Energy Policy, Elsevier, vol. 86(C), pages 493-505.
    2. De Cian, Enrica & Dasgupta, Shouro & Hof, Andries F. & van Sluisveld, Mariësse A.E. & Köhler, Jonathan & Pfluger, Benjamin & van Vuuren, Detlef P., 2020. "Actors, decision-making, and institutions in quantitative system modelling," Technological Forecasting and Social Change, Elsevier, vol. 151(C).
    3. Dasgupta, Shouro & De Cian, Enrica, 2016. "Institutions and the Environment: Existing Evidence and Future Directions," MITP: Mitigation, Innovation and Transformation Pathways 240747, Fondazione Eni Enrico Mattei (FEEM).
    4. M. Calcaterra & L. Aleluia Reis & P. Fragkos & T. Briera & H. S. Boer & F. Egli & J. Emmerling & G. Iyer & S. Mittal & F. H. J. Polzin & M. W. J. L. Sanders & T. S. Schmidt & A. Serebriakova & B. Stef, 2024. "Reducing the cost of capital to finance the energy transition in developing countries," Nature Energy, Nature, vol. 9(10), pages 1241-1251, October.
    5. Cotterman, Turner & Small, Mitchell J. & Wilson, Stephen & Abdulla, Ahmed & Wong-Parodi, Gabrielle, 2021. "Applying risk tolerance and socio-technical dynamics for more realistic energy transition pathways," Applied Energy, Elsevier, vol. 291(C).
    6. Abdulla, A. & Vaishnav, P. & Sergi, B. & Victor, D.G., 2019. "Limits to deployment of nuclear power for decarbonization: Insights from public opinion," Energy Policy, Elsevier, vol. 129(C), pages 1339-1346.
    7. Steffen, Bjarne, 2020. "Estimating the cost of capital for renewable energy projects," Energy Economics, Elsevier, vol. 88(C).
    8. Polzin, Friedemann & Sanders, Mark & Serebriakova, Alexandra, 2021. "Finance in global transition scenarios: Mapping investments by technology into finance needs by source," Energy Economics, Elsevier, vol. 99(C).
    9. Minwoo Hyun & Aleh Cherp & Jessica Jewell & Yeong Jae Kim & Jiyong Eom, 2021. "Feasibility trade-offs in decarbonisation of power sector with high coal dependence: A case of Korea," Papers 2111.02872, arXiv.org.
    10. Shi, Wenjing & Ou, Yang & Smith, Steven J. & Ledna, Catherine M. & Nolte, Christopher G. & Loughlin, Daniel H., 2017. "Projecting state-level air pollutant emissions using an integrated assessment model: GCAM-USA," Applied Energy, Elsevier, vol. 208(C), pages 511-521.
    11. J. Farmer & Cameron Hepburn & Penny Mealy & Alexander Teytelboym, 2015. "A Third Wave in the Economics of Climate Change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(2), pages 329-357, October.
    12. Iyer, Gokul C. & Clarke, Leon E. & Edmonds, James A. & Hultman, Nathan E., 2016. "Do national-level policies to promote low-carbon technology deployment pay off for the investor countries?," Energy Policy, Elsevier, vol. 98(C), pages 400-411.
    13. Hussain, Jamal & Zhou, Kui & Muhammad, Faqir & Khan, Danish & Khan, Anwar & Ali, Najabat & Akhtar, Rizwan, 2021. "Renewable energy investment and governance in countries along the belt & Road Initiative: Does trade openness matter?," Renewable Energy, Elsevier, vol. 180(C), pages 1278-1289.
    14. Xin Xu & Yuming Shen & Hanchu Liu, 2022. "What Cause Large Spatiotemporal Differences in Carbon Intensity of Energy-Intensive Industries in China? Evidence from Provincial Data during 2000–2019," IJERPH, MDPI, vol. 19(16), pages 1-18, August.
    15. Yangsiyu Lu & Francois Cohen & Stephen M. Smith & Alexander Pfeiffer, 2022. "Plant conversions and abatement technologies cannot prevent stranding of power plant assets in 2 °C scenarios," Nature Communications, Nature, vol. 13(1), pages 1-11, December.
    16. Briera, Thibault & Lefèvre, Julien, 2024. "Reducing the cost of capital through international climate finance to accelerate the renewable energy transition in developing countries," Energy Policy, Elsevier, vol. 188(C).
    17. Kim, Yeong Jae & Soh, Moonwon & Cho, Seong-Hoon, 2022. "Identifying optimal financial budget distributions for the low-carbon energy transition between emerging and developed countries," Applied Energy, Elsevier, vol. 326(C).
    18. Hepburn, Cameron & Pfeiffer, Alexander & Vogt-Schilb, Adrien & J. Tulloch, Daniel, 2018. "Dead on arrival? Implicit stranded assets in leading IAM scenarios," INET Oxford Working Papers 2018-08, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    19. Marian Leimbach & Nico Bauer, 2022. "Capital markets and the costs of climate policies," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 24(3), pages 397-420, July.
    20. Friedemann Polzin & Mark Sanders & Bjarne Steffen & Florian Egli & Tobias S. Schmidt & Panagiotis Karkatsoulis & Panagiotis Fragkos & Leonidas Paroussos, 2021. "The effect of differentiating costs of capital by country and technology on the European energy transition," Climatic Change, Springer, vol. 167(1), pages 1-21, July.
    21. Bellakhal, Rihab & Ben Kheder, Sonia & Haffoudhi, Houda, 2019. "Governance and renewable energy investment in MENA countries:How does trade matter?," Energy Economics, Elsevier, vol. 84(C).

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