Uncertainties in Technology Experience Curves for Integrated Assessment Models

Abstract:     
The phenomenon of technological learning has been observed across a wide spectrum of energy and environmental technologies. Quantitative modeling of experience curves has become an increasingly common method of representing endogenous technical change in long-term integrated assessment models used for energy and environmental policy analysis. However, many issues remain to be addressed in the use of experience curves to quantify long-term cost trends of energy technologies. This paper highlights and critically reviews some of the major sources of uncertainty and their implications to model outcomes. It draws on recent empirical literature, as well as on new data characterizing historical cost trends in the early deployment of three environmental technologies especially relevant to energy systems. Our findings indicate the need for a more thorough and systematic examination of the uncertainty of experience curve formulations on the outcomes of energy and environmental policy analyses that extend over many decades.

Keywords: Experience curve, learning curve, learning-by-doing, uncertainties, endogenous technological change, integrated assessment models

Working Paper Series