Decarbonization requires the transformation of power markets towards renewable energies and investment costs are decisive for the deployed technologies. Exogenous cost assumptions cannot fully reflect the underlying dynamics of technological change. We implement divergent learning-by-doing...

Current policies focus on reducing CO2 emissions, neglecting the existence and impact of other air pollutants such as NO2, NH3, NMVOC, PPM10, PPM2.5, and SO2. We devise a strategy to model those emissions and related social cost accounting for diverging social and private discount rates in an...

Energy system and power market models refrain from distinguishing between private and social discount rates. We devise a strategy to account for diverging private and social discount rates in intertemporal optimization frameworks, resulting in an optimal carbon tax above the marginal damage when...

Current decarbonization policies neglect damages from local air pollutants. We analyze the trade-off between complementary taxation of carbon emissions and local air pollution. We quantify results for the European power market until 2050. Taxing only air pollution results in social cost of 5,890...

Current decarbonization policies neglect damages from local air pollutants. We devise a strategy to model those emissions’ damages in intertemporal optimization frameworks, resulting in optimal carbon and air pollution taxes above their marginal damages when private discount rates exceed...

Current decarbonization policies neglect damages from local air pollutants. We analyze the tradeoff between complementary taxation of carbon emissions and local air pollution. We quantify results for the European power market until 2050. Taxing only air pollution results in social cost of 5,890...

Bottom-up optimization models neglect the inclusion of investment behavior We introduce three investor types that differ in their investment cost specifications, financing costs, and discounting. This leads to a substantially different pace and rate of adoption for specific generation...

Policymakers misjudge results of technology-rich optimization models because those models specify investment cost differently and thus are not equally sensitive towards changing financing cost and discount rates. We apply an intertemporally optimizing power market model to analyze three...

Policymakers misjudge results of technology-rich optimization models with high spatial and temporal resolutions because such models specify investment cost differently and thus are not equally sensitive to changing financing cost and discount rates. We apply an intertemporally optimizing power...