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Market reaction to economic climate change policy: The merit order effect and the limits of marginal abatement cost curves
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Industrial Dynamics (Closed 20130101). (Industriell Dynamik)ORCID iD: 0000-0001-7028-0624
2014 (English)Conference paper, Poster (Refereed)
Abstract [en]

Governments around the world have introduced economic policies to combat global warming. In the form of taxes, emissions trading schemes and subsidies, these polices seek to influence market actors to reduce greenhouse gas emissions. One tool used to understand market reactions to such policy is marginal abatement cost curves. These curves optimise the two dimensions of cost per abatement and abatement. However; in reality corporations instead optimize for cost reductions, not the combined cost and abatement. Climate policy also affects the merit order in energy systems, which prohibits the robustness of engineered bottom-up MACCs. In this study, alternative models for understanding and optimizing the response to climate change policy is explored. Recommendations for future application on analyzing policy implications are given.

Place, publisher, year, edition, pages
Elsevier, 2014.
National Category
Energy Engineering Business Administration Economics
Research subject
Energy Technology; Industrial Engineering and Management
URN: urn:nbn:se:kth:diva-147506OAI: diva2:730128
Energy Systems Conference, 24-25 June 2014, London
Swedish Energy Agency, 35894-1

QC 20140708

Available from: 2014-06-27 Created: 2014-06-27 Last updated: 2014-07-08Bibliographically approved

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Levihn, Fabian
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