Decision making under uncertainty and inertia constraints: sectoral implications of the when flexibility

Current debates on climate mitigation emphasize the role of the inertia of the economic system. Our aim in this paper is to study more in depth how sectorally differentiated inertia impacts on optimal C02-emission abatement policies. Using the STARTS model, we show that optimal abatement levels and costs differ sensibly among sectors. Differential inertia is the critical determinant of this trade-off, especially in case of a 20-year delay in the action, or in an underestimation of the growth of the transportation sector. In particular, the burden of any additional abatement effort falls on the most flexible sector, i.e. the industry.Debates on mitigation emphasize the role of inertia of the economic system. This paper aims at studying more in depth how sectorally differentiated inertia should influence optimal CO2 emission abatement policies. Using a two-sector version of STARTS, we show that under perfect expectations, optimal abatement profiles and associated costs differ sensibly between a flexible and a rigid sector (transportation). In a second step, we scrutinize the role of the uncertainty by testing the case of a 20-year delay of action and an underestimated growth of the transportation sector. We do this for three concentration ceilings and we point out the magnitude of the burden which falls on the flexible sector. We derive some policy implications for the ranking of public policies and for incentive instruments to be set up at international level.Inertia; Sectoralization; Climate change

Two historical changes in the narrative of energy forecasts

A collection of 417 energy scenarios was assembled and harmonized to compare what they said about nuclear, fossil and renewable energy thirty years from their publication. Based on data analysis, we divide the recent history of the energy forecasting in three periods. The first is defined by a decline in nuclear optimism, approximately until 1990. The second by a stability of forecasts, approximately until 2005. The third by a rise in the forecasted share of renewable energy sources. We also find that forecasts tend to cohere, that is they have a low dispersion within periods compared to the change across periods

Dynamic consistency problems behind the Kyoto protocol

International audienceThis paper examines the economic rationale behind both the quantitative targets and the flexibility mechanisms adopted in the Kyoto Protocol. It synthesises some theoretical dimensions of the debate about the so-called "when flexibility" of climate policies, explaining the importance of the interplay between uncertainty and technico-economic inertia. Numerical results shows that the aggregate Kyoto abatement target is consistent with a stochastic dynamic optimum in which a 450 ppm concentration ceiling is seriously considered. Turning to the EU-US debate about the interpretation of the "supplemental to" condition in Article 3 of the Kyoto Protocol regarding the articulation between international trading systems and domestic policies and measures, this text illuminates the risk of dynamic inconsistencies due to the heterogeneity of capital stocks in the economy, if price signals do not emerge in due time from GHGs trading systems because of the ''hot air'' in some countries and the discovery of low costs abatement potentials in Annex B countries. Numerical simulations show that a delay of action on sectors with large inertia of capital stocks and of the consumption styles may under such circumstances ultimately undermine the economic viability of climate policies beyond 2012. Some lessons are derived for the future of climate policies and negotiations about the implementation of the Kyoto Protocol

Decision making under uncertainty and inertia constraints: sectoral implications of the when flexibility

International audienceCurrent debates on climate mitigation emphasize the role of the inertia of the economic system. Our aim in this paper is to study more in depth how sectorally differentiated inertia impacts on optimal C02-emission abatement policies. Using the STARTS model, we show that optimal abatement levels and costs differ sensibly among sectors. Differential inertia is the critical determinant of this trade-off, especially in case of a 20-year delay in the action, or in an underestimation of the growth of the transportation sector. In particular, the burden of any additional abatement effort falls on the most flexible sector, i.e. the industry.Debates on mitigation emphasize the role of inertia of the economic system. This paper aims at studying more in depth how sectorally differentiated inertia should influence optimal CO2 emission abatement policies. Using a two-sector version of STARTS, we show that under perfect expectations, optimal abatement profiles and associated costs differ sensibly between a flexible and a rigid sector (transportation). In a second step, we scrutinize the role of the uncertainty by testing the case of a 20-year delay of action and an underestimated growth of the transportation sector. We do this for three concentration ceilings and we point out the magnitude of the burden which falls on the flexible sector. We derive some policy implications for the ranking of public policies and for incentive instruments to be set up at international level

Optimal control models and elicitation of attitudes towards climate damages

This paper examines the consequences of various attitudes towards climate damages through a family of stochastic optimal control models (RESPONSE): cost-efficiency for a given temperature ceiling; cost-benefit analysis with a "pure preference for current climate regime" and full cost-benefit analysis. The choice of a given proxy of climate change risks is actually more than a technical option. It is essentially motivated by the degree of distrust regarding the legitimacy of an assessment of climate damages and the possibility of providing in due time reliable and non controversial estimates. Our results demonstrate that a) for early decades abatement, the difference between various decision-making frameworks appears to matter less than the difference between stochastic and non stochastic approach given the cascade of uncertainty from emissions to damages; b) in a stochastic approach, the possibility of non-catastrophic singularities in the damage function is sufficient to significantly increase earlier optimal abatements; c) a window of opportunity for action exists up to 2040: abatements further delayed may induce significant regret in case of bad news about climate response or singularities in damages.Cost-efficiency; Cost-benefit; Climate sensitivity; Climate change damages; Uncertainty; Optimal climate policy; Decision making frameworks

Dynamic consistency problems behind the Kyoto protocol

This paper examines the economic rationale behind both the quantitative targets and the flexibility mechanisms adopted in the Kyoto Protocol. It synthesises some theoretical dimensions of the debate about the so-called "when flexibility" of climate policies, explaining the importance of the interplay between uncertainty and technico-economic inertia. Numerical results shows that the aggregate Kyoto abatement target is consistent with a stochastic dynamic optimum in which a 450 ppm concentration ceiling is seriously considered. Turning to the EU-US debate about the interpretation of the "supplemental to" condition in Article 3 of the Kyoto Protocol regarding the articulation between international trading systems and domestic policies and measures, this text illuminates the risk of dynamic inconsistencies due to the heterogeneity of capital stocks in the economy, if price signals do not emerge in due time from GHGs trading systems because of the ''hot air'' in some countries and the discovery of low costs abatement potentials in Annex B countries. Numerical simulations show that a delay of action on sectors with large inertia of capital stocks and of the consumption styles may under such circumstances ultimately undermine the economic viability of climate policies beyond 2012. Some lessons are derived for the future of climate policies and negotiations about the implementation of the Kyoto Protocol.changement climatique, modélisation intégrée

Barriers to the adoption of renewable and energy-efficient technologies in the Vietnamese power sector

This paper examines the major barriers to the deployment of geothermal, small hydro and advanced coal power generation technologies in Vietnam. It ranks their severity by applying the analytical hierarchy process to data from a survey of 37 domestic experts and stakeholders. Key barriers to a wider penetration of small hydro generation technologies are insufficient capital, a lack of domestic suppliers and unsatisfactory government policies. Barriers to geothermal power are related to information and awareness problems, a lack of R&D and industrial capability, a weak policy framework and the remoteness of geothermal sites. For advanced coal power technologies, the barriers are weak industrial capability, high cost and a lack of technical knowledge. The experts consulted in this study view changes in government actions as the key to overcoming the abovementioned barriers. They recommend investing more in R&D activities, improving R&D capacity through joint-venture schemes and reforming investment policy/legislation for the electric power industry as the most appropriate solutions.analytical hierarchy process; renewables; energy efficient technologies.

SecYEG activates GTPases to drive the completion of cotranslational protein targeting

Signal recognition particle (SRP) and its receptor (SR) comprise a highly conserved cellular machine that cotranslationally targets proteins to a protein-conducting channel, the bacterial SecYEG or eukaryotic Sec61p complex, at the target membrane. Whether SecYEG is a passive recipient of the translating ribosome or actively regulates this targeting machinery remains unclear. Here we show that SecYEG drives conformational changes in the cargo-loaded SRP–SR targeting complex that activate it for GTP hydrolysis and for handover of the translating ribosome. These results provide the first evidence that SecYEG actively drives the efficient delivery and unloading of translating ribosomes at the target membrane