Kiel Working Papers, Kiel Institute for World Economics
No 1732:
Expectation-Driven Climate Treaties with Breakthrough Technologies
Daiju Narita and Ulrich J. Wagner
Abstract: The production of bioenergy is considered to be a
promising energy source for a sustainable energy mix and it is politically
promoted in many countries. With the exception of Brazilian ethanol,
bioenergy not competitive to fossil energy sources, and therefore needs to
be subsidised. Several types of bioenergy are based on bulky raw biomass
with high per unit transport costs, importantly impacting on the plant’s
production costs and profitability. In addition, considerable quantities of
digestates are released, causing disposal costs. Various studies in the
past aimed primarily at analysing transport costs of inputs. In this paper
we focus on disposal costs of fermentation digestates from biogas
production in Germany and analyse different processing techniques and their
impact on profitability for three plant size in three case study areas. Our
results show that especially in regions with only a small amount of
agricultural land and a large heterogeneity in its agricultural area,
processing of digestates increases the profitability of biogas production.
The same accounts for regions with high livestock density, where the area
needed for disposal is comparatively large. The cost efficiency is enforced
by a high share of animal excrements on input and the biogas plant size
Keywords: International environmental agreements (IEAs), climate policy, technology choice, expectations, multiple equilibria; (follow links to similar papers)
JEL-Codes: Q54,; O33,; H87; (follow links to similar papers)
30 pages, September 2011
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