Article: Modelling energy technology dynamics: methodology for adaptive expectations models with learning by doing and learning by searching Journal: International Journal of Global Energy Issues (IJGEI) 2000 Vol.14 No.1/2/3/4 pp.104 - 115 Abstract: This paper presents a module endogenising technical change which is capable of being attached to large scale energy models that follow an adaptive-expectations. The formulation includes, apart from the more classical learning by doing effects, quantitative relationships between technology performance and R&D expenditure. It even attempts to go further by partially endogenising the latter by incorporating an optimisation module describing private equipment manufacturers| R&D budget allocation in a context of risk and expectation. Having presented this module in abstract, the paper proceeds to describe how an operational version of it has been constructed and implemented inside a large-scale partial equilibrium world energy model (the POLES model). Concerning learning functions problems associated with the data are alluded to, the hybrid econometric methods used to estimate them are presented as well as the adjustments which had to be effected to ensure a smooth incorporation into the large model. In the final sections is explained the use of the model itself to generate partial foresight parameters for the determination of return expectations particularly in view of CO<SUB align="right"><SMALL>2</SMALL></SUB> constraints and associated carbon values. Inderscience Publishers - linking academia, business and industry through research

Title: Modelling energy technology dynamics: methodology for adaptive expectations models with learning by doing and learning by searching

Authors: Nikolaos Kouvaritakis, Antonio Soria, Stephane Isoard

Addresses: Institute for Prospective Technological Studies, JRC-IPTS, Edificio World Trade Center, Isla de Ia Cartuja s/n, E-41092, Sevilla, Spain. ' Institute for Prospective Technological Studies, JRC-IPTS, Edificio World Trade Center, Isla de Ia Cartuja s/n, E-41092, Sevilla, Spain. ' Institute for Prospective Technological Studies, JRC-IPTS, Edificio World Trade Center, Isla de Ia Cartuja s/n, E-41092, Sevilla, Spain

Abstract: This paper presents a module endogenising technical change which is capable of being attached to large scale energy models that follow an adaptive-expectations. The formulation includes, apart from the more classical learning by doing effects, quantitative relationships between technology performance and R&D expenditure. It even attempts to go further by partially endogenising the latter by incorporating an optimisation module describing private equipment manufacturers| R&D budget allocation in a context of risk and expectation. Having presented this module in abstract, the paper proceeds to describe how an operational version of it has been constructed and implemented inside a large-scale partial equilibrium world energy model (the POLES model). Concerning learning functions problems associated with the data are alluded to, the hybrid econometric methods used to estimate them are presented as well as the adjustments which had to be effected to ensure a smooth incorporation into the large model. In the final sections is explained the use of the model itself to generate partial foresight parameters for the determination of return expectations particularly in view of CO₂ constraints and associated carbon values.

Keywords: modelling; endogenous technical change; learning curve; R&D investment; portfolio analysis; partial foresight.

DOI: 10.1504/IJGEI.2000.004384

International Journal of Global Energy Issues, 2000 Vol.14 No.1/2/3/4, pp.104 - 115

Published online: 10 May 2004 *

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Title: Modelling energy technology dynamics: methodology for adaptive expectations models with learning by doing and learning by searching

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