The objective of this review is to find evidence on international best practices on financing mod... more The objective of this review is to find evidence on international best practices on financing models for energy efficiency investments in buildings.
A proposed mechanism to facilitate additional voluntary and policy emission reductions efforts in... more A proposed mechanism to facilitate additional voluntary and policy emission reductions efforts in emissions trading schemes
This report reviews the literature on innovation and transition theory with a view to gaining a g... more This report reviews the literature on innovation and transition theory with a view to gaining a greater understanding of the nature of innovation processes, particularly those involving disruptive change and systems transformation. The report has been commissioned by the Visions and Pathways 2040 project for the CRC for Low Carbon Living. A key aim of the review is to supply insights and frameworks to assist the visioning, pathway analysis and policy work of the project. • There are a number of variations in the use of the
Societal and technological transformation in the face of climate change will be won or lost in ou... more Societal and technological transformation in the face of climate change will be won or lost in our cities and urban communities. This is not just because of the global urban demographic shift with more than 50 percent of the population now living in urban conditions, or because cities contribute around 70 to 80 percent of greenhouse gas emissions, but it is as much to do with the growing economic and political importance of cities. Patterns of production and consumption are defined for—and increasingly shaped by—urban living. In spite of having no formal standing as actors within global processes to address climate change, cities have stepped up as powerful voices and a loci for action.
Visions and Pathways 2040 is a research and engagement project that seeks to envision possible fu... more Visions and Pathways 2040 is a research and engagement project that seeks to envision possible future forms of Australian cities and lifestyles in 2040 if they have achieved an 80% reduction in their greenhouse gas emissions (on 2013 levels) and have addressed broader resilience issues, and, secondly, to 'backcast' from visions possible pathways to the present that may, in turn, suggest policies, strategies and governance structures for reaching them. This paper describes the approaches that were used in the initial phases of the project and early research results. A selection of the 'glimpses' of possible future low-carbon, resilient city forms and their associated lifestyles are presented. The 'glimpses' convey emerging aspirations for urban change, such as those related to localised resilience, cultural change, and community sustainability. We also outline an initial set of scenarios end-states (i.e. set in 2040), describing alternative futures of sustaina...
Visioning exercises were convened in Melbourne and Sydney, Australia, to explore how these cities... more Visioning exercises were convened in Melbourne and Sydney, Australia, to explore how these cities could become low-carbon and maintain resilience over the next 25 years. Drawing on the concept of frames-in particular Schon and Rein's conceptualisation of a frame as a "diagnostic-prescriptive story" that is based on an underlying structure of beliefs, perceptions and appreciation-this paper seeks to: Attend to the ways that workshop participants framed the problems (of emissions reduction and maintaining resilience); surface framing processes and potential related sources of political contention; and discuss the role of visioning exercises in sustainability transitions. Five frames are identified, along with the interpretive orientations underpinning each frame, framing processes and the potential for frame conflict and alignment. The study suggests that the designers and facilitators of visioning exercises need to be attentive to framing processes, potential framing contests, and related social processes during a visioning exercise. Key implications are identified, with a focus on whether an exercise seeks to "open up" a complex issue or to agree upon a singular, i.e., consensual, agenda.
ABSTRACT Over the last decade, cap-and-trade emissions schemes have emerged as one of the favoure... more ABSTRACT Over the last decade, cap-and-trade emissions schemes have emerged as one of the favoured policy instruments for reducing GHG emissions. An inherent design feature of cap-and-trade schemes is that, once the cap on emissions has been set, no additional reductions beyond this level can be provided by the actions of those individuals, organizations and governments within the covered sectors. Thus, the emissions cap constitutes an emissions floor. This feature has been claimed by some to have undesirable implications, in that it discourages ethically motivated mitigation actions and preempts the possibility that local, state and national governments can take additional mitigation action in the context of weak national or regional targets. These criticisms have become prominent in Australia and the US within the public debate regarding the adoption of an emissions trading scheme (ETS). These criticisms and their potential solutions are reviewed. A set-aside reserve is proposed to automatically retire ETS permits, which would correspond to verified and additional emissions reductions. This minimizes the possibility that ethically motivated mitigation actions are discouraged, allows for additional action by other levels of government, while providing transparency to other market participants on the level of permit retirements.
Strong flagship policies may be blocked by those opposing action. c Weak flagship policies may be... more Strong flagship policies may be blocked by those opposing action. c Weak flagship policies may be blocked by those seeking strong action. c Flotilla policies have less impact on large incumbents. c Flotilla policies can benefit a select group of stakeholders, who provide support. c Flotilla policies are likely to remain as key elements of the climate policy mix.
Australia is establishing an economy-wide emissions trading scheme, with a detailed proposal tabl... more Australia is establishing an economy-wide emissions trading scheme, with a detailed proposal tabled by the government in December 2008 and a scheme start planned for mid-2010. The proposal is for unilateral linking through CDM and JI, but no bilateral linkages to start with. Concerns about permit prices rising too high are prominent, and are reflected in a ban on permit sales and a price cap provision. This paper evaluates the proposed Australian scheme with regard to international emissions trading and linkages. Different scenarios for the Australian permit price under unilateral linking are considered. Options for bilateral linking with the European Union and New Zealand schemes are evaluated, including regarding access to ‘hot air ’ units. We argue that Australia should dismantle obstacles to linking such as the price cap, and move toward bilateral linking with suitable schemes.
It is difficult to eliminate all market power in electricity markets and it is therefore frequent... more It is difficult to eliminate all market power in electricity markets and it is therefore frequently suggested that some market power should be tolerated: extra revenues contribute to fixed cost recovery, facilitate investment, and increase security of supply. This suggestion implicitly assumes all generation technologies benefit equally from market power. We assess a mixture of conventional and intermittent generation, e.g. coal plants and wind power. If all output is sold in the spot market, then intermittent generation benefits less from market power than conventional generation. Forward contracts or option contracts reduce the level of market power but the bias against intermittent generators persists.
the public and private sectors in the U.S. and internationally. The views experessed herein are t... more the public and private sectors in the U.S. and internationally. The views experessed herein are those of the authors and do not necessarily reflect those of the
The residential solar photovoltaics (PV) market in Australia has expanded rapidly in recent years... more The residential solar photovoltaics (PV) market in Australia has expanded rapidly in recent years due to a combination of falling costs and government incentives. In light of the recent debate on the effectiveness of such policies, this thesis uses a dynamic discrete choice model to empirically evaluate the impact of capacity-based subsidies and feed-in tariffs on small-scale solar PV adoptions in 244 postcodes in NSW from 2001 to 2013. I find that around 56% to 81% of solar PV installations can be attributed to the effect of government policies during this time period. I also find subsidies to be a more cost-effective policy for CO2 emissions reduction, with the cost per tonne of CO2 abatement being within the range of $81 $124 for subsidies and $117 $236 for feed-in tariffs. Assuming a social cost of carbon of $85, the feed-in tariff does not pass the cost-benefit test, although the same cannot be conclusively said for the capacity-based subsidy.
Transparency is fundamental to the delivery of competitive electricity markets. The timely releas... more Transparency is fundamental to the delivery of competitive electricity markets. The timely release of reliable data helps market participants to understand past events and help predict the likely evolution of supply, demand and transmission conditions as they impact on price formation. The availability of relevant data to regulators and other third parties also allows for more effective monitoring of electricity markets and the detection of market power abuse. A critical aspect of transparency is that it eliminates (or very substantially reduces) differences in available information between dominant and smaller market participants, thus increasing the trust and confidence needed for both to engage in trade and make decisions. The combined result is more cost-effective investment and operating decisions, reduced risk premia, greater market confidence, increased market liquidity and efficiency, and lower barriers to entry. Regulators, the European Commission and market participants al...
• This report reviews the literature on innovation and transition theory with a view to gaining a... more • This report reviews the literature on innovation and transition theory with a view to gaining a greater understanding of the nature of innovation processes, particularly those involving disruptive change and systems transformation. The report has been commissioned by the Visions and Pathways 2040 project for the CRC for Low Carbon Living. A key aim of the review is to supply insights and frameworks to assist the visioning, pathway analysis and policy work of the project. • There are a number of variations in the use of the term " innovation ". These variations depend on, for example, where the innovation is located in the value chain (e.g. product, process or organisational innovation), the novelty of the knowledge underlying the innovation, or the extent of the economic /market impact of the innovation. Confusingly, the idea of " incremental " versus " radical " innovation is often applied to both the second and the third of these situations. The move to a low carbon urban future will most likely not rely on one or even a small number of technological innovations, but is likely to arise from a constellation of interacting systems of innovations, some involving radical knowledge-based innovation and some involving incremental and " recombinative " innovations. Another term commonly used interchangeably with systems innovation is " transition ". • The theory of innovations and transitions is not based on any single discipline or school of thought. Rather, the concepts and insights draw upon a broad range of disciplines and practices BLOCKINgoing BLOCKINback BLOCKINto BLOCKINthe BLOCKINfirst BLOCKINhalf BLOCKINof BLOCKINthe BLOCKIN20 th century. Early economic theories viewed the innovation process as a relatively simple, one-directional process from invention to commercial development to diffusion into the market place. A consequence of this linear model was a strong prioritisation of either supply– push factors such as research and development (R&D) or demand–pull factors such as relative prices as the drivers of innovation. • Modern thinking on innovation has a more nuanced and richer picture, with a wider set of implications for those hoping to assist, shape or direct the innovation process and system change. Key ideas include appreciating the importance of actor networks; the role of institutions; the co-evolutionary nature of the technologies, institutions, social practices and business strategies; the role of feedback and path dependency in socioeconomic systems; and a greater understanding of the different types of knowledge and learning processes. • …
Read the the Visions & Pathways 2040's second year project report on the potential contributi... more Read the the Visions & Pathways 2040's second year project report on the potential contributions of the digital economy to low-carbon futures for Australian cities
Visions and Pathways 2050 is a new research and engagement program which will explore and articul... more Visions and Pathways 2050 is a new research and engagement program which will explore and articulate visions and policy-technology pathways for a lowto zerocarbon built environment in Australia. The program involves three universities (University of Melbourne, UNSW and Swinburne), CSIRO and a large number of government and industry partners, and has been funded as a four year project of the newly established CRC for Low Carbon Living. Guided by the possibility that a systems-level transformation will be necessary to achieve lowto zero-carbon urban living, the research team aims to track current research, industry and policy intelligence, coordinate with other international foresight and back-casting projects, identify emerging technical and social innovations, and refine a set of visions for a future lowto zero-carbon urban Australia. Each year, two large workshops (in different cities) will deliberate on futures that are seen as desirable and feasible, as well as examine possible p...
The objective of this review is to find evidence on international best practices on financing mod... more The objective of this review is to find evidence on international best practices on financing models for energy efficiency investments in buildings.
A proposed mechanism to facilitate additional voluntary and policy emission reductions efforts in... more A proposed mechanism to facilitate additional voluntary and policy emission reductions efforts in emissions trading schemes
This report reviews the literature on innovation and transition theory with a view to gaining a g... more This report reviews the literature on innovation and transition theory with a view to gaining a greater understanding of the nature of innovation processes, particularly those involving disruptive change and systems transformation. The report has been commissioned by the Visions and Pathways 2040 project for the CRC for Low Carbon Living. A key aim of the review is to supply insights and frameworks to assist the visioning, pathway analysis and policy work of the project. • There are a number of variations in the use of the
Societal and technological transformation in the face of climate change will be won or lost in ou... more Societal and technological transformation in the face of climate change will be won or lost in our cities and urban communities. This is not just because of the global urban demographic shift with more than 50 percent of the population now living in urban conditions, or because cities contribute around 70 to 80 percent of greenhouse gas emissions, but it is as much to do with the growing economic and political importance of cities. Patterns of production and consumption are defined for—and increasingly shaped by—urban living. In spite of having no formal standing as actors within global processes to address climate change, cities have stepped up as powerful voices and a loci for action.
Visions and Pathways 2040 is a research and engagement project that seeks to envision possible fu... more Visions and Pathways 2040 is a research and engagement project that seeks to envision possible future forms of Australian cities and lifestyles in 2040 if they have achieved an 80% reduction in their greenhouse gas emissions (on 2013 levels) and have addressed broader resilience issues, and, secondly, to 'backcast' from visions possible pathways to the present that may, in turn, suggest policies, strategies and governance structures for reaching them. This paper describes the approaches that were used in the initial phases of the project and early research results. A selection of the 'glimpses' of possible future low-carbon, resilient city forms and their associated lifestyles are presented. The 'glimpses' convey emerging aspirations for urban change, such as those related to localised resilience, cultural change, and community sustainability. We also outline an initial set of scenarios end-states (i.e. set in 2040), describing alternative futures of sustaina...
Visioning exercises were convened in Melbourne and Sydney, Australia, to explore how these cities... more Visioning exercises were convened in Melbourne and Sydney, Australia, to explore how these cities could become low-carbon and maintain resilience over the next 25 years. Drawing on the concept of frames-in particular Schon and Rein's conceptualisation of a frame as a "diagnostic-prescriptive story" that is based on an underlying structure of beliefs, perceptions and appreciation-this paper seeks to: Attend to the ways that workshop participants framed the problems (of emissions reduction and maintaining resilience); surface framing processes and potential related sources of political contention; and discuss the role of visioning exercises in sustainability transitions. Five frames are identified, along with the interpretive orientations underpinning each frame, framing processes and the potential for frame conflict and alignment. The study suggests that the designers and facilitators of visioning exercises need to be attentive to framing processes, potential framing contests, and related social processes during a visioning exercise. Key implications are identified, with a focus on whether an exercise seeks to "open up" a complex issue or to agree upon a singular, i.e., consensual, agenda.
ABSTRACT Over the last decade, cap-and-trade emissions schemes have emerged as one of the favoure... more ABSTRACT Over the last decade, cap-and-trade emissions schemes have emerged as one of the favoured policy instruments for reducing GHG emissions. An inherent design feature of cap-and-trade schemes is that, once the cap on emissions has been set, no additional reductions beyond this level can be provided by the actions of those individuals, organizations and governments within the covered sectors. Thus, the emissions cap constitutes an emissions floor. This feature has been claimed by some to have undesirable implications, in that it discourages ethically motivated mitigation actions and preempts the possibility that local, state and national governments can take additional mitigation action in the context of weak national or regional targets. These criticisms have become prominent in Australia and the US within the public debate regarding the adoption of an emissions trading scheme (ETS). These criticisms and their potential solutions are reviewed. A set-aside reserve is proposed to automatically retire ETS permits, which would correspond to verified and additional emissions reductions. This minimizes the possibility that ethically motivated mitigation actions are discouraged, allows for additional action by other levels of government, while providing transparency to other market participants on the level of permit retirements.
Strong flagship policies may be blocked by those opposing action. c Weak flagship policies may be... more Strong flagship policies may be blocked by those opposing action. c Weak flagship policies may be blocked by those seeking strong action. c Flotilla policies have less impact on large incumbents. c Flotilla policies can benefit a select group of stakeholders, who provide support. c Flotilla policies are likely to remain as key elements of the climate policy mix.
Australia is establishing an economy-wide emissions trading scheme, with a detailed proposal tabl... more Australia is establishing an economy-wide emissions trading scheme, with a detailed proposal tabled by the government in December 2008 and a scheme start planned for mid-2010. The proposal is for unilateral linking through CDM and JI, but no bilateral linkages to start with. Concerns about permit prices rising too high are prominent, and are reflected in a ban on permit sales and a price cap provision. This paper evaluates the proposed Australian scheme with regard to international emissions trading and linkages. Different scenarios for the Australian permit price under unilateral linking are considered. Options for bilateral linking with the European Union and New Zealand schemes are evaluated, including regarding access to ‘hot air ’ units. We argue that Australia should dismantle obstacles to linking such as the price cap, and move toward bilateral linking with suitable schemes.
It is difficult to eliminate all market power in electricity markets and it is therefore frequent... more It is difficult to eliminate all market power in electricity markets and it is therefore frequently suggested that some market power should be tolerated: extra revenues contribute to fixed cost recovery, facilitate investment, and increase security of supply. This suggestion implicitly assumes all generation technologies benefit equally from market power. We assess a mixture of conventional and intermittent generation, e.g. coal plants and wind power. If all output is sold in the spot market, then intermittent generation benefits less from market power than conventional generation. Forward contracts or option contracts reduce the level of market power but the bias against intermittent generators persists.
the public and private sectors in the U.S. and internationally. The views experessed herein are t... more the public and private sectors in the U.S. and internationally. The views experessed herein are those of the authors and do not necessarily reflect those of the
The residential solar photovoltaics (PV) market in Australia has expanded rapidly in recent years... more The residential solar photovoltaics (PV) market in Australia has expanded rapidly in recent years due to a combination of falling costs and government incentives. In light of the recent debate on the effectiveness of such policies, this thesis uses a dynamic discrete choice model to empirically evaluate the impact of capacity-based subsidies and feed-in tariffs on small-scale solar PV adoptions in 244 postcodes in NSW from 2001 to 2013. I find that around 56% to 81% of solar PV installations can be attributed to the effect of government policies during this time period. I also find subsidies to be a more cost-effective policy for CO2 emissions reduction, with the cost per tonne of CO2 abatement being within the range of $81 $124 for subsidies and $117 $236 for feed-in tariffs. Assuming a social cost of carbon of $85, the feed-in tariff does not pass the cost-benefit test, although the same cannot be conclusively said for the capacity-based subsidy.
Transparency is fundamental to the delivery of competitive electricity markets. The timely releas... more Transparency is fundamental to the delivery of competitive electricity markets. The timely release of reliable data helps market participants to understand past events and help predict the likely evolution of supply, demand and transmission conditions as they impact on price formation. The availability of relevant data to regulators and other third parties also allows for more effective monitoring of electricity markets and the detection of market power abuse. A critical aspect of transparency is that it eliminates (or very substantially reduces) differences in available information between dominant and smaller market participants, thus increasing the trust and confidence needed for both to engage in trade and make decisions. The combined result is more cost-effective investment and operating decisions, reduced risk premia, greater market confidence, increased market liquidity and efficiency, and lower barriers to entry. Regulators, the European Commission and market participants al...
• This report reviews the literature on innovation and transition theory with a view to gaining a... more • This report reviews the literature on innovation and transition theory with a view to gaining a greater understanding of the nature of innovation processes, particularly those involving disruptive change and systems transformation. The report has been commissioned by the Visions and Pathways 2040 project for the CRC for Low Carbon Living. A key aim of the review is to supply insights and frameworks to assist the visioning, pathway analysis and policy work of the project. • There are a number of variations in the use of the term " innovation ". These variations depend on, for example, where the innovation is located in the value chain (e.g. product, process or organisational innovation), the novelty of the knowledge underlying the innovation, or the extent of the economic /market impact of the innovation. Confusingly, the idea of " incremental " versus " radical " innovation is often applied to both the second and the third of these situations. The move to a low carbon urban future will most likely not rely on one or even a small number of technological innovations, but is likely to arise from a constellation of interacting systems of innovations, some involving radical knowledge-based innovation and some involving incremental and " recombinative " innovations. Another term commonly used interchangeably with systems innovation is " transition ". • The theory of innovations and transitions is not based on any single discipline or school of thought. Rather, the concepts and insights draw upon a broad range of disciplines and practices BLOCKINgoing BLOCKINback BLOCKINto BLOCKINthe BLOCKINfirst BLOCKINhalf BLOCKINof BLOCKINthe BLOCKIN20 th century. Early economic theories viewed the innovation process as a relatively simple, one-directional process from invention to commercial development to diffusion into the market place. A consequence of this linear model was a strong prioritisation of either supply– push factors such as research and development (R&D) or demand–pull factors such as relative prices as the drivers of innovation. • Modern thinking on innovation has a more nuanced and richer picture, with a wider set of implications for those hoping to assist, shape or direct the innovation process and system change. Key ideas include appreciating the importance of actor networks; the role of institutions; the co-evolutionary nature of the technologies, institutions, social practices and business strategies; the role of feedback and path dependency in socioeconomic systems; and a greater understanding of the different types of knowledge and learning processes. • …
Read the the Visions & Pathways 2040's second year project report on the potential contributi... more Read the the Visions & Pathways 2040's second year project report on the potential contributions of the digital economy to low-carbon futures for Australian cities
Visions and Pathways 2050 is a new research and engagement program which will explore and articul... more Visions and Pathways 2050 is a new research and engagement program which will explore and articulate visions and policy-technology pathways for a lowto zerocarbon built environment in Australia. The program involves three universities (University of Melbourne, UNSW and Swinburne), CSIRO and a large number of government and industry partners, and has been funded as a four year project of the newly established CRC for Low Carbon Living. Guided by the possibility that a systems-level transformation will be necessary to achieve lowto zero-carbon urban living, the research team aims to track current research, industry and policy intelligence, coordinate with other international foresight and back-casting projects, identify emerging technical and social innovations, and refine a set of visions for a future lowto zero-carbon urban Australia. Each year, two large workshops (in different cities) will deliberate on futures that are seen as desirable and feasible, as well as examine possible p...
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Papers by Paul Twomey