Chapter 17 of The Global Energy Assessment (GEA)  identifies three key branching points in the transition to a low carbon energy system: energy efficiency, transportation system electrification, and the composition of the supply side portfolio. While GEA sustainability objectives are easily achieved in a low demand, advanced transport world, there is evidence that society continues to focus on supply side measures despite significantly higher returns to demand side investment . This research examines the welfare impact of R&D investment on the supply side across a range of demand, transportation sector, and climate policy scenarios.
A Monte Carlo style sample of eight key parameters of five low carbon energy supply technologies was used to create a set of inputs to the MESSAGE model. The results of these “what-if” scenarios were then combined with elicitation-derived probability information  to calculate the expected value of key performance metrics. A sensitivity analysis was performed across demand, climate policy, and transportation electrification assumptions.
Initial results indicate that the relative impact of supply side R&D investment varies widely across technologies. The capital cost of biofuel plants in particular appears to have a significant impact on welfare (Figure 1).
Figure 1. Scatterplot of GDP vs Consumption by R&D investment level shows a connection between R&D funding level and welfare (click on the image to enlarge).
While research is still ongoing, initial results indicate that a carefully designed supply side R&D investment strategy can improves welfare while working within the reality of today’s supply side focus.
 Riahi K, Dentener F, Gielen D, Grubler A, Jewell J, Klimont Z, Krey V, McCollum D, Pachauri S, Rao S, van Ruijven B, van Vuuren D, Wilson C (2012) Chapter 17: Energy pathways for sustainable development. In Global Energy Assessment - Toward a Sustainable Future. Cambridge University Press, Cambridge, UK, pp. 1203.
 Baker E, Bosetti V, Anadon LD, Henrion M, Reis LA. Future Costs of Key Green Energy Technologies: Harmonization and Aggregation of Energy Technology Expert Elicitation Data. Energy Policy (submitted).
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Please note these Proceedings have received limited or no review from supervisors and IIASA program directors, and the views and results expressed therein do not necessarily represent IIASA, its National Member Organizations, or other organizations supporting the work.
Last edited: 29 September 2015
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