On the global economic potentials and marginal costs of non-renewable resources and the price of energy commodities

A model is presented in this work for simulating endogenously the evolution of the marginal costs of production of energy carriers from non-renewable resources, their consumption, depletion pathways and timescales. Such marginal costs can be used to simulate the long term average price formation of energy commodities. Drawing on previous work where a global database of energy resource economic potentials was constructed, this work uses cost distributions of non-renewable resources in order to evaluate global flows of energy commodities. A mathematical framework is given to calculate endogenous flows of energy resources given an exogenous commodity price path. This framework can be used in reverse in order to calculate an exogenous marginal cost of production of energy carriers given an exogenous carrier demand. Using rigid price inelastic assumptions independent of the economy, these two approaches generate limiting scenarios that depict extreme use of natural resources. This is useful to characterise the current state and possible uses of remaining non-renewable resources such as fossil fuels and natural uranium. The theory is however designed for use within economic or technology models that allow technology substitutions. In this work, it is implemented in the global power sector model FTT:Power. Policy implications are given.

On the changeover timescales of technology transitions and induced efficiency changes: an overarching theory

This paper presents a general theory that aims at explaining timescales observed empirically in technology transitions and predicting those of future transitions. This framework is used further to derive a theory for exploring the dynamics that underlie the complex phenomenon of irreversible and path dependent price or policy induced efficiency changes. Technology transitions are known to follow patterns well described by logistic functions, which should more rigorously be modelled mathematically using the Lotka-Volterra family of differential equations, originally developed to described the population growth of competing species. The dynamic evolution of technology has also been described theoretically using evolutionary dynamics similar to that observed in nature. The theory presented here joins both approaches and presents a methodology for predicting changeover time constants in order to describe real systems of competing technologies. The problem of price or policy induced efficiency changes becomes naturally explained using this framework. Examples of application are given.