Directed technical change and the adoption of CO2 abatement technology: The case of CO2 capture and storage
AbstractThis paper studies the cost-effectiveness of combining traditional environmental policy, such as CO2-trading schemes, and technology policy that has aims of reducing the cost and speeding the adoption of CO2 abatement technology. For this purpose, we develop a dynamic general equilibrium model that captures empirical links between CO2 emissions associated with energy use, directed technical change and the economy. We specify CO2 capture and storage (CCS) as a discrete CO2 abatement technology. We find that combining CO2-trading schemes with an adoption subsidy is the most effective instrument to induce adoption of the CCS technology. Such a subsidy directly improves the competitiveness of the CCS technology by compensating for its markup over the cost of conventional electricity. Yet, introducing R&D subsidies throughout the entire economy leads to faster adoption of the CCS technology as well and in addition can be cost-effective in achieving the abatement target.
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Bibliographic InfoArticle provided by Elsevier in its journal Energy Economics.
Volume (Year): 30 (2008)
Issue (Month): 6 (November)
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Web page: http://www.elsevier.com/locate/eneco
CO2 capture and storage Computable general equilibrium modeling Directed technical change Environmental policy Technology policy;
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- CO2 - Mathematical and Quantitative Methods - - - - -
- cap - - - - - -
- and - - - - - -
- sto - - - - - -
- Com - Mathematical and Quantitative Methods - - - - -
- gen - - - - - -
- equ - - - - - -
- mod - - - - - -
- Dir - Microeconomics - - - - -
- tec - - - - - -
- cha - - - - - -
- Env - Macroeconomics and Monetary Economics - - - - -
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- Tec - - - - - -
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