Rethinking economic energy policy research-developing qualitative scenarios to identify feasible energy policies

Abstract

To accelerate deep decarbonisation in the energy sector, the discipline of economics should focus on identifying feasible instead of optimal policies. To do so, economic analysis should include four features: Complexity (a), non-economic aspects (b), uncertainty (c) and stakeholders (d). The aim of this paper is to show that qualitative scenario analysis represents a promising alternative to conventional optimisation approaches and meets these requirements. This paper develops qualitative scenarios for the case study of gas infrastructure modifications with hydrogen and carbon capture and storage technologies in Germany. In the results, the six socio-economic qualitative scenarios are described in more detail. A comparison between the case study and a conventional approach reveals three limitations of the latter and highlights the value of qualitative scenario development. The authors distil the advantages of qualitative scenario analysis and discuss challenges and chances, that go beyond the case study. In conclusion, developing socio-economic scenarios has a large potential to improve economic policy assessment. It also allows to catch up with the rethinking of energy research taking place in other disciplines.