Climate mitigation under an uncertain technology future: A TIAM-World analysis

This paper explores the impacts of long-term technology and climate uncertainties on the optimal evolution of the World energy system. Stochastic programming with the TIAM-World model is used for a parametric analysis of hedging strategies, varying the probabilities associated to each of two contrasted technology outlooks. The parametric analysis constitutes an original supplement to the computation of hedging strategies by identifying technologies that are robust under a broad range of probabilities of the two technology outlooks. Natural gas appears to be one of the most appealing robust options in an uncertain technological context, especially in China, given its relatively low emissions and the low capital cost of associated technologies. Natural gas and some other options are in fact considered as “super-hedging” actions, penetrating more in the hedging solution than in any of the deterministic scenarios. Nuclear power and CCS use are less robust: they depend much more on either the level of the climate target or the probabilities of the technology outlooks. The analysis also shows that technological uncertainty has a greater impact under milder climate targets than under more severe ones. Future research might consider a larger set of possible technology outlooks, as well as specific analyses focused on key characteristics of low-carbon technologies.

► The hedging strategy is not an average of deterministic strategies. ► The hedging offers a mix of abatement actions that cannot easily be found otherwise. ► Natural gas is an appealing choice in an uncertain context, especially in China. ► China reduces its emissions only when options in other countries are exhausted.