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The Value of Better Information on Technology R&D Programs in Response to Climate Change

Abstract

Expert elicitations are a promising method for determining how R&D investments are likely to have an impact on technological advance in climate change energy technologies. But, expert elicitations are time consuming and resource intensive. Thus, we investigate the value of the information gained in expert elicitations. More specifically, given baseline elicitations from one study, we estimate the expected value of better information (EVBI) from revisiting and improving these assessments. We find that the EVBI is very large in comparison with the cost of performing expert elicitations. We also find that EVBI is higher on technologies with larger budgets and with net values that are not too high or too low.

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Notes

  1. 1.

    Note that we do not address the initial value of information gained from the original elicitations. This is for two reasons. First, since the elicitations have already been done, it would be an odd exercise requiring us to pretend that we did not know the outcome of the elicitations. Second, it is very hard to determine how one would go about deriving an a priori probability distribution without performing some form of elicitation.

  2. 2.

    http://www.icarus-project.org/

  3. 3.

    http://belfercenter.ksg.harvard.edu/project/10/energy_technology_innovation_policy.html?page_id=213

  4. 4.

    http://cdmc.epp.cmu.edu/

  5. 5.

    Influence Diagrams, commonly used in decision analysis, are Bayesian Networks with decision nodes.

  6. 6.

    More detailed discussions of our methods and assumptions on related technologies are included in [57].

  7. 7.

    The 4 is for the opportunity cost.

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Acknowledgements

The research leading to these results was completed while Baker was visiting the Precourt Energy Efficiency Center at Stanford University and was partially supported by NSF under award number SES-0745161 and by the European Research Council under the European Community’s Seventh Framework Programme (FP7/2007-2013)/ERC grant agreement n° 240895—Project ICARUS “Innovation for Climate Change Mitigation: a Study of energy R&D, its Uncertain Effectiveness and Spillovers”. We thank Haewon McJeon for providing the GCAM results.

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Baker, E., Peng, Y. The Value of Better Information on Technology R&D Programs in Response to Climate Change. Environ Model Assess 17, 107–121 (2012). https://doi.org/10.1007/s10666-011-9278-y

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Keywords

  • Value of information
  • Technology R&D
  • Uncertainty
  • Environmental policy