Olivier Bahn

A stochastic control model for optimal timing of climate policies

A stochastic control model is proposed as a paradigm for the design of optimal timing of greenhouse gas (GHG) emission abatement. The resolution of uncertainty concerning climate sensitivity and the technological breakthrough providing access to a carbon-free production economy are modeled as controlled stochastic jump processes. The optimal policy is characterized using the dynamic programming solution to a piecewise deterministic optimal control problem. A numerical illustration is developed with a set of parameters calibrated on recently proposed models for integrated assessment of climate policies. The results are interpreted and the insights they provide on the timing issue of climate policy are discussed.

A MERGE Model with Endogenous Technological Progress

We have developed a new version of the MERGE model, called MERGE-ETL, to analyse the dynamics of endogenous technological learning (ETL) in the energy system. This paper describes the basic formulation of MERGE-ETL, the solving techniques used for this model and some first numerical results in the context of policies designed to mitigate global climate changes.

Experimental behavior of an interior point cutting plane algorithm for convex programming: an application to geometric programming

Abstract This paper deals with the computation of the interior point cutting plane algorithm of Goffin, Haurie and Vial, with a special application to the solution of convex differentiable programming problems. The interior point cutting plane algorithm is closely related to the classical method of Cheney and Goldstein, and Kelley, but the cuts are generated from different, more central, points in order to achieve deeper cuts and thereby accelerate convergence. The method is quite general in purpose as it can be applied to a large class of convex differentiable and nondifferentiable optimization problems. The paper focuses on the different stages of a MATLAB implementation and the overall performance of the algorithm. The test problems come from a set of convex geometric programming problems.

Incorporating different endogenous learning formulations in MERGE

This paper presents the implementation of endogenous technological change, following either a one-factor or a two-factor learning curve, in the MERGE model. We have indeed developed a new version of this model, called MERGE-ETL, to analyse the dynamics of endogenous technological learning (ETL) in the energy system. This paper describes first the basic formulation of MERGE-ETL, then the solving techniques used for this model, and presents finally some numerical results in the context of policies designed to mitigate a global climate change.

Swiss energy taxation options to curb CO2 emissions

This study offers insights into the design of economically efficient policies to curb carbon dioxide (CO2) emissions in Switzerland and in other European countries. The method uses a model of the energy system to investigate various options for taxation to reduce CO2emissions. This study proposes as a first option the introduction of a ‘hedging tax’, that balances the risks of delaying measures to reduce CO2 emissions against those of premature reduction measures. It then assesses multinational policy options and considers as a second alternative international co-operation to curb joint CO2 emissions by means of a uniform tax applied in different countries. The simulation of such a strategy among three European countries (Switzerland, the Netherlands and Belgium) suggests that there may be significant benefits to be gained when CO2 reduction takes place in the countries where it is relatively cheap to do so.

Stability of international environmental agreements: an illustration with asymmetrical countries

In this paper we use a dynamic model to analyze the composition and stability of international environmental agreements (IEAs) in an asymmetrical framework. Signatory countries are assumed to optimize the total welfare of the international agreements members, while non-signatory countries optimize their own individual welfare, taking into account the dynamics of the pollution stock. Our model is calibrated using data from the MERGE climate policy assessment model. We briefly review two contrasting approaches to define stability of IEAs, and provide a numerical illustration in each case.

A Class Of Games With Coupled Constraints To Model International Ghg Emission Agreements

This paper deals with the design of equilibrium solutions with coupled constraints in dynamic games of greenhouse gas (GHG) emissions abatement. Self enforcing International Environmental Agreements (IEA) among different groups of countries call for Nash equilibrium solutions when the abatement strategies of the countries are defined. In this paper we study the effect of having another party, like e.g. the United Nations which would impose to all players a coupled constraint on the total emissions allowed over the 21st century, or on the concentration of carbon reached at the end of the century. We show, using different formulations of environmental game, that the normalized equilibria obtained under a coupled constraint on emissions or concentration is close to Pareto optimality. This gives a clue on the way the post Kyoto negotiations could yield an agreement which could be close to efficiency.

The secondary benefits of climate change mitigation: an overlapping generations approach

We modify a model of climate and economy to address the effects of the reduction in atmospheric pollutants which occurs as a result of climate change mitigation policies. In particular, the reduction of sulphur dioxide (SO2) emissions as a result of climate change policies leads to reduced statistical morbidity and infant mortality, but increased short term climate change. It remains the case, even with the consideration of secondary benefits, that there are welfare costs of GHG emission control to almost all working-age agents alive when the policies are imposed, which suggests that the consideration of secondary benefits alone may not be sufficient to provoke aggressive action on climate change.

Advanced Mathematical Programming Modeling to Assess the Benefits from International CO2 Abatement Cooperation

The aim of this paper is to propose a method for coupling national energy models, to identify the dividends of international cooperation in atmospheric pollution abatement and efficient energy use. It indicates, also, how to solve the resulting large‐scale multinational model. It simulates finally a cooperation of four European countries for curbing their carbon dioxide (CO2) emissions.

A decomposition approach to multiregional environmental planning: A numerical study

The aim of this paper is to present the first experiments in using a new mathematical programming decomposition technique for solving multi-regional energy-environment planning models. The paper shows that: (i) the approach can be efficiently implemented for coupling several large-scale energy models; and (ii) the consideration of several European countries together indicates the benefits to be gained from an harmonization of a possible C02 tax.