Jean-Francois Mercure

The dynamics of technology diffusion and the impacts of climate policy instruments in the decarbonisation of the global electricity sector

This paper presents an analysis of climate policy instruments for the decarbonisation of the global electricity sector in a non-equilibrium economic and technology diffusion perspective. Energy markets are driven by innovation, path-dependent technology choices and diffusion. However, conventional optimisation models lack detail on these aspects and have limited ability to address the effectiveness of policy interventions because they do not represent decision-making. As a result, known effects of technology lock-ins are liable to be underestimated. In contrast, our approach places investor decision-making at the core of the analysis and investigates how it drives the diffusion of low-carbon technology in a highly disaggregated, hybrid, global macroeconometric model, FTT:Power-E3MG. Ten scenarios to 2050 of the electricity sector in 21 regions exploring combinations of electricity policy instruments are analysed, including their climate impacts. We show that in a diffusion and path-dependent perspective, the impact of combinations of policies does not correspond to the sum of impacts of individual instruments: synergies exist between policy tools. We argue that the carbon price required to break the current fossil technology lock-in can be much lower when combined with other policies, and that a 90% decarbonisation of the electricity sector by 2050 is affordable without early scrapping.

Fermi Surface and van Hove Singularities in the Itinerant Metamagnet Sr3Ru2O7

The low-energy electronic structure of the itinerant metamagnet Sr3Ru2O7 is investigated by angle-resolved photoemission and density-functional calculations. We find well-defined quasiparticle bands with resolution-limited linewidths and Fermi velocities up to an order of magnitude lower than in single layer Sr2RuO4. The complete topography, the cyclotron masses, and the orbital character of the Fermi surface are determined, in agreement with bulk sensitive de Haas-van Alphen measurements. An analysis of the dxy band dispersion reveals a complex density of states with van Hove singularities near the Fermi level, a situation which is favorable for magnetic instabilities.

Quantum oscillations near the metamagnetic transition in Sr3Ru2O7

We report detailed investigation of quantum oscillations in Sr3Ru2O7, observed inductively (the de Haas-van Alphen effect) and thermally (the magnetocaloric effect). Working at fields from 3 T to 18 T allowed us to straddle the metamagnetic transition region and probe the low- and high-field Fermi liquids. The observed frequencies are strongly field-dependent in the vicinity of the metamagnetic transition, and there is evidence for magnetic breakdown. We also present the results of a comprehensive rotation study. The most surprising result concerns the field dependence of the measured quasiparticle masses. Contrary to conclusions previously drawn by some of us as a result of a study performed with a much poorer signal to noise ratio, none of the five Fermi surface branches for which we have good field-dependent data gives evidence for a strong field dependence of the mass. The implications of these experimental findings are discussed.

Gross violation of the Wiedemann-Franz law in a quasi-one-dimensional conductor

When charge carriers are spatially confined to one dimension, conventional Fermi-liquid theory breaks down. In such Tomonaga–Luttinger liquids, quasiparticles are replaced by distinct collective excitations of spin and charge that propagate independently with different velocities. Although evidence for spin–charge separation exists, no bulk low-energy probe has yet been able to distinguish successfully between Tomonaga–Luttinger and Fermi-liquid physics. Here we show experimentally that the ratio of the thermal and electrical Hall conductivities in the metallic phase of quasi-one-dimensional Li0.9Mo6O17 diverges with decreasing temperature, reaching a value five orders of magnitude larger than that found in conventional metals. Both the temperature dependence and magnitude of this ratio are consistent with Tomonaga–Luttinger liquid theory. Such a dramatic manifestation of spin–charge separation in a bulk three-dimensional solid offers a unique opportunity to explore how the fermionic quasiparticle picture recovers, and over what time scale, when coupling to a second or third dimension is restored.

Modelling complex systems of heterogeneous agents to better design sustainability transitions policy

This article proposes a fundamental methodological shift in the modelling of policy interventions for sustainability transitions in order to account for complexity (e.g. self-reinforcing mechanisms, such as technology lock-ins, arising from multi-agent interactions) and agent heterogeneity (e.g. differences in consumer and investment behaviour arising from income stratification). We first characterise the uncertainty faced by climate policy-makers and its implications for investment decision-makers. We then identify five shortcomings in the equilibrium and optimisation-based approaches most frequently used to inform sustainability policy: (i) their normative, optimisation-based nature, (ii) their unrealistic reliance on the full-rationality of agents, (iii) their inability to account for mutual influences among agents (multi-agent interactions) and capture related self-reinforcing (positive feedback) processes, (iv) their inability to represent multiple solutions and path-dependency, and (v) their inability to properly account for agent heterogeneity. The aim of this article is to introduce an alternative modelling approach based on complexity dynamics and agent heterogeneity, and explore its use in four key areas of sustainability policy, namely (1) technology adoption and diffusion, (2) macroeconomic impacts of low-carbon policies, (3) interactions between the socio-economic system and the natural environment, and (4) the anticipation of policy outcomes. The practical relevance of the proposed methodology is subsequently discussed by reference to four specific applications relating to each of the above areas: the diffusion of transport technology, the impact of low-carbon investment on income and employment, the management of cascading uncertainties, and the cross-sectoral impact of biofuels policies. In conclusion, the article calls for a fundamental methodological shift aligning the modelling of the socio-economic system with that of the climatic system, for a combined and realistic understanding of the impact of sustainability policies.

An assessement of global energy resource economic potentials

This paper presents an assessment of global economic energy potentials for all major natural energy resources. This work is based on both an extensive literature review and calculations using natural resource assessment data. Economic potentials are presented in the form of cost-supply curves, in terms of energy flows for renewable energy sources, or fixed amounts for fossil and nuclear resources, with strong emphasis on uncertainty, using a consistent methodology that allow direct comparisons to be made. In order to interpolate through available resource assessment data and associated uncertainty, a theoretical framework and a computational methodology are given based on statistical properties of different types of resources, justified empirically by the data, and used throughout. This work aims to provide a global database for natural energy resources ready to integrate into models of energy systems, enabling to introduce at the same time uncertainty over natural resource assessments. The supplementary material provides theoretical details and tables of data and parameters that enable this extensive database to be adapted to a variety of energy systems modelling frameworks.

FTT:Power: A global model of the power sector with induced technological change and natural resource depletion

This work introduces a model of Future Technology Transformations for the power sector (FTT:Power), a representation of global power systems based on market competition, induced technological change (ITC) and natural resource use and depletion. It is the first component of a family of sectoral bottom-up models of technology, designed for integration into the global macroeconometric model E3MG. ITC occurs as a result of technological learning produced by cumulative investment and leads to highly nonlinear, irreversible and path dependent technological transitions. The model uses a dynamic coupled set of logistic differential equations. As opposed to traditional bottom-up energy models based on systems optimisation, such differential equations offer an appropriate treatment of the times and structure of change involved in sectoral technology transformations, as well as a much reduced computational load. Resource use and depletion are represented by local cost–supply curves, which give rise to different regional energy landscapes. The model is explored for a single global region using two simple scenarios, a baseline and a mitigation case where the price of carbon is gradually increased. While a constant price of carbon leads to a stagnant system, mitigation produces successive technology transitions leading towards the gradual decarbonisation of the global power sector.

Quantum Oscillations in the Anomalous Phase in Sr3Ru2O7

We report measurements of quantum oscillations detected in the putative nematic phase of Sr3Ru2O7. Improvements in sample purity enabled the resolution of small amplitude de Haas-van Alphen (dHvA) oscillations between two first order metamagnetic transitions delimiting the phase. Two distinct frequencies were observed, whose amplitudes follow the normal Lifshitz-Kosevich profile. Variations of the dHvA frequencies are explained in terms of a chemical potential shift produced by reaching a peak in the density of states, and an anomalous field dependence of the oscillatory amplitude provides information on domains.

On the global economic potentials and marginal costs of non-renewable resources and the price of energy commodities

A model is presented in this work for simulating endogenously the evolution of the marginal costs of production of energy carriers from non-renewable resources, their consumption, depletion pathways and timescales. Such marginal costs can be used to simulate the long term average price formation of energy commodities. Drawing on previous work where a global database of energy resource economic potentials was constructed, this work uses cost distributions of non-renewable resources in order to evaluate global flows of energy commodities. A mathematical framework is given to calculate endogenous flows of energy resources given an exogenous commodity price path. This framework can be used in reverse in order to calculate an endogenous marginal cost of production of energy carriers given an exogenous carrier demand. Using rigid price inelastic assumptions independent of the economy, these two approaches generate limiting scenarios that depict extreme use of natural resources. This is useful to characterise the current state and possible uses of remaining non-renewable resources such as fossil fuels and natural uranium. The theory is however designed for use within economic or technology models that allow technology substitutions. In this work, it is implemented in the global power sector model FTT:Power. Policy implications are given.

The role of money and the financial sector in energy-economy models used for assessing climate and energy policy

ABSTRACT This article outlines a critical gap in the assessment methodology used to estimate the macroeconomic costs and benefits of climate and energy policy, which could lead to misleading information being used for policy-making. We show that the Computable General Equilibrium (CGE) models that are typically used for assessing climate policy use assumptions about the financial system that sit at odds with the observed reality. These assumptions lead to ‘crowding out’ of capital and, because of the way the models are constructed, negative economic impacts (in terms of gross domestic product (GDP) and welfare) from climate policy in virtually all cases. In contrast, macro-econometric models, which follow non-equilibrium economic theory and adopt a more empirical approach, apply a treatment of the financial system that is more consistent with reality. Although these models also have major limitations, they show that green investment need not crowd out investment in other parts of the economy – and may therefore offer an economic stimulus. Our conclusion is that improvements in both modelling approaches should be sought with some urgency – both to provide a better assessment of potential climate and energy policy and to improve understanding of the dynamics of the global financial system more generally. POLICY RELEVANCE This article discusses the treatment of the financial system in the macroeconomic models that are used in assessments of climate and energy policy. It shows major limitations in approach that could result in misleading information being provided to policy-makers.