Breaktrough technologies for energy R&D
Any cost-effective policy framework to address climate change should foster efficient R&D, innovation and diffusion of greenhouse gas (GHG) emission-reducing technologies. Technological progress will be needed both to bring down the cost of available technologies which in many key emitting areas remains significantly more expensive than the fossil-fuel based technologies they could potentially displace, and to expand the pool of available technologies and their mitigation potential.
Currently, it would appear that the scope and scale of low-carbon technologies envisaged for the future might be limited. Most are of a specific rather than general purpose nature, with their potential use being restricted to a narrow range of economic activities (e.g. wind, solar and nuclear energy to power generation, hydrogen and biofuels to transport etc.).
Furthermore, constraints remain (e.g. related to energy storage possibilities) on the extent to which emissions from any industry could be abated through the use of one single mitigating option. For these reasons, a broad portfolio of technological options will probably have to be involved in mitigating climate change.
Summary of main findings
A carbon price has sizeable effects on R&D and technology deployment.
In the absence of major technological breakthroughs, induced
technological change associated with higher R&D investment and
technology deployment may have only modest effects on policy costs,
especially under less stringent GHG concentration stabilisation
objectives.
R&D focusing on major technological breakthroughs
could significantly reduce future mitigation costs and would give a far
greater role to induced technological change in containing such costs.
However, lower long-term mitigation costs come at the price of higher medium-run costs.
Even assuming R&D could achieve major technological breakthroughs,
a strong price signal is still needed to spur the necessary
investments.
The simulations suggest that a global R&D fund to subsidise
R&D and/or low-carbon technology deployment could further reduce
mitigation costs if it came on top of a carbon price.
Finally, while raising world R&D spending over and above the
increase induced by a carbon price can reduce mitigation costs, R&D
alone is not an effective option to address climate change.
This post is an extract of the CMCC research paper “The role
of R&D and technology
diffusion in climate
change mitigation: New
perspectives using the
WITCH model” by Valentina Bosetti, Carlo Carraro, Romain Duval, and Massimo Tavoni
Read more on this research
- Abstract, Introduction, Summary of main findings, and References [pdf- 133 kb]
- CMCC research paper RP0063 [pdf – 540 kb]
Read more on the WITCH model