Climate Change And The Economics Of Targeted Mitigation In Sectors With Long-Lived Capital Stock

摘要: Mitigation investments in long-lived capital stock (LLKS) differ from other types of mitigation that, once established, LLKS can lock-in a stream emissions for extended periods time. Moreover, historical examples industrial countries suggest that projects or networks tend to be lumpy, and generate significant indirect induced besides direct emissions. Looking forward, urbanization rapid economic growth similar decisions about are being will soon made many developing countries. In their current form, carbon markets do not provide correct incentives because the constraint on extends only 2012, does extend Targeted programs regions sectors which is built at rate thus necessary avoid getting locked into highly carbon-intensive LLKS. Even if were (geographically, sectorally, over time), public intervention would still required, three main reasons. First, ensure associated with taken account investor’s financial cost-benefit analysis. Second, facilitate project network financing bridge gap between revenues accrue time as project/network unfolds needed upfront finance lumpy investments. Third, internalize non-carbon externalities (e.g., local pollution) and/or lift barriers lack capacity handle new technologies) penalize low-carbon alternatives relative high-carbon ones.