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TOCSIN Work Package 1

TOCSIN Work Package 1. David M. Reiner Judge Business School University of Cambridge. Implementing Technology and R&D in Economic Models.

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TOCSIN Work Package 1

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  1. TOCSINWork Package 1 David M. Reiner Judge Business School University of Cambridge

  2. Implementing Technology and R&D in Economic Models • Implementation of technology-based policies and representation of RD&D policies in modeling frameworks is often limited by the structure of the models and the simplifications necessary to represent such policies. Reiner - TOCSIN Kickoff

  3. NOT induced or endogenous technical change • We seek to explicitly model the effects of a parallel or complementary approach to developing technologies using funds from general government revenues that have been earmarked to speed the development and penetration of low-carbon technologies. Reiner - TOCSIN Kickoff

  4. RD&D Spending: BAU or a Quantum Leap? • Even conservatively, total spending by the major world economies (EU, US, Japan) will be on the order of billions of euros per year. Public and private expenditures in this area have increased dramatically over the last few years and recent political attention. • Beyond merely extrapolating current policies, one can imagine ‘crash’ programs, equivalent to Airbus, or moon or Mars missions or a Marshall Plan Reiner - TOCSIN Kickoff

  5. Bringing Technologies out of the Laboratory • We will explore the other considerations which allow technologies to move beyond the pilot and demonstration stages and explore the economic, political and business requirements for successful commercialization Reiner - TOCSIN Kickoff

  6. International Collaborations • There have been a number of international consortia launched in recent years including the CSLF, IPHE, Gen IV Forum, M2M, EOS as well as the broader Asia-Pacific effort • Will these initiatives cannibalize support for more aggressive actions by diverting resources and political attention away from a legally-binding targets-based regulatory approach or rather will they facilitate tougher actions by making steeper reductions less costly to implement? Reiner - TOCSIN Kickoff

  7. Developing Scenarios • We seek to develop a range of plausible scenarios that can capture the range of options that are likely to affect technology transfer to major developing countries. • A major focus will be on technologies such as CO2 capture and storage (CCS) that can exploit existing indigenous coal resources in China and India, as well as on transfer of advanced production and end-use technologies based on renewable or low carbon energy. • We will survey existing avenues for RD&D cooperation and contemplate alternative designs to support cooperation and transfer of advanced technologies. Reiner - TOCSIN Kickoff

  8. Links to other WPs • The link between effective RD&D and successful commercialization and policy implementation will be investigated as well as the potential impact on developing country participation in an emissions reduction regime. Scenario development will involve interactions with the other workpackages, to ensure overall consistency. Reiner - TOCSIN Kickoff

  9. Survey of existing literature • Task leader: UCAMB • Review existing literature on post-2012 climate change policy architectures and R&D cooperation; multi-criteria analysis of alternative policy options (economic effectiveness, environmental integrity, feasibility, acceptability and equity) • Commented bibliography plus comparative analysis of international environmental policies • Draft by End May 2007 • Final Deliverable D1.1 Month 6 Reiner - TOCSIN Kickoff

  10. Identify R&D strategies • Task leader: UTSIN • Explore different pathways by which RD&D cooperation might occur including multilateral arrangements such as the Clean Development Mechanism (CDM), the Global Environment Facility (GEF), and the World Bank, bilateral arrangements (e.g., recent US-India or UK-China agreements), and via foreign direct investment by individual firms. • Draft by End Jan 2008 Reiner - TOCSIN Kickoff

  11. Evaluate RD&D Cooperation as a Policy Instrument. • Task leader: FEEM • The links between RD&D cooperation and mitigation policy will be questioned. What sorts of arrangements and circumstances are more likely to take best advantage of RD&D investments? The potential for successful RD&D to alter emissions trajectories will be investigated by tracing how innovation can translate into commercially viable technologies that achieves significant market penetration in capital-constrained emerging economies. • Draft by End Jan 2008 Reiner - TOCSIN Kickoff

  12. Analyze the incentive role of CDM and IET • Task leader: IIMVA • The role of CDM and international emission trading to create incentive for developing countries’ participation in mitigation strategies and R&D cooperation will be explored. • Draft by End Jan 2008 • Final Deliverable 1.2 Month 16 Reiner - TOCSIN Kickoff

  13. Propose a set of policy options for long-term climate mitigation and RD&D cooperation • Task leader: UCAMB • WP 1 will propose a set of policy strategies including: policy instruments, level, timing and regional coverage of GHG emissions reductions that will drive model developments in WP 2 and WP 3, and that will be assessed in WP 4 and WP 5. • Identify possible linkage between RD&D strategies and market instruments for climate change mitigation • Draft by End Nov 2007 • Final Deliverable D1.3 Month 16 Reiner - TOCSIN Kickoff

  14. Report on Policy Implications of Simulation Results • Propose EU-China-India technology-oriented climate policy options • Based on insights from simulations executed in WP4 and WP5, it will provide policy recommendations for self-enforcing RD&D and technology cooperation agreements • Draft due by Jan 2009 • Final Deliverable 1.4 Month 28? Reiner - TOCSIN Kickoff

  15. Sample Scenarios/Options • Technology Burden Sharing (and Transfers) • Renewable Portfolio Standards (maximize deployment of renewables rather than low-C) • Capture Ready (lower retrofit costs) • Invest in Breakthrough Technologies (model low probability of large reduction in carbon intensity of electric or transport sector) Reiner - TOCSIN Kickoff

  16. Preliminary Questions • Focus on Which Post-2012 scenarios? • How to model technology cooperation? (which types of technology and which cooperative efforts?) • How to determine the time lag associated with technology transfer? • Balance of sectoral emphasis (e.g., electric sector vs transport vs. industrial)? • How to model end-use change or changes in consumer behavior? Reiner - TOCSIN Kickoff

  17. Timeline • Regular telecons to discuss challenges of implementing different options and scenarios in the economic modeling frameworks • Drafts of individual tasks under WP1 will require sufficient time for refinement and interaction with all partners • Need for a meeting at 6 months? • Milan meeting to finalize options and scenarios Reiner - TOCSIN Kickoff

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