Research Team: James R. McFarland, John Sterman, Howard J. Herzog and Henry D. Jacoby.
Sponsors: US Department of Energy (Office of Science)
Summary:
Advanced technologies will play a critical role in achieving significant greenhouse gas reductions. Integrated energy-economy models commonly illustrate that the adoption of advanced technology such as carbon capture and sequestration is economically attractive. However, embedded within integrated assessment models are ad hoc assumptions on the penetration rate of these advanced technologies. This research seeks to refine our understanding of plausible technology penetration rates in a carbon-constrained world.
We are developing a model to characterize the penetration rate of carbon capture and sequestration technologies as function of carbon price and other regulatory policies. We have identified a multitude of dynamic factors that influence technology adoption and diffusion from the economics and social science literature. Broadly speaking, these factors may be classified into five categories: technology, regulatory policy, business cycles, industry structure, and corporate strategy. Current work involves developing a microeconomic, system dynamics model of the US electric power sector including technology supply, fuel supply, carbon dioxide storage, and electricity end-use. The model will enable the identification of the most critical factors and key levers for accelerating technology penetration. Additionally, a reduced form of this model capturing the effect of carbon price on penetration rate will be incorporated into one or more integrated assessment models (e.g., the MIT EPPA model).
Publications to date:
McFarland, J.R.and H.J. Herzog, "Incorporating Carbon Capture and Storage Technologies in Integrated Assessment Models," Energy Economics 28: 632-52 (2006).
McFarland, J.R., J.M. Reilly, and H.J. Herzog, "Representing Energy Technologies in Top-down Economic Models using Bottom-up Information," Energy Economics , Vol. 26, Issue 4, pp 685-707, (2004). <PDF>
McFarland, J.R. and H.J. Herzog, "Incorporating Carbon Capture and Storage Technologies in Integrated Assessment Models," presented at the EMF Workshop on Climatic Change Impacts and Integrated Assessments, Snowmass, Colorado, July 28-August 7 (2003). <PDF>
