Avoiding Carbon Lock-In: Policy Options for Advancing Structural Change
AbstractA major obstacle for the transformation to a low-carbon economy is the risk of a carbon lock-in: fossil fuel-based ('dirty') technologies dominate the market although their carbon-free ('clean') alternatives are dynamically more efficient. We study the interaction of learning-by-doing spillovers and the substitution elasticity between the clean and the dirty sector in an intertemporal general equilibrium model. We find that the substitution possibilities between the two sectors have an ambivalent effect: although a high substitution elasticity requires less aggressive mitigation policies than a low one, it creates a greater lock-in in the absence of regulation. The optimal policy response consists of a permanent carbon tax as well as a learning subsidy for clean technologies. A single policy instrument can also avoid high welfare losses, but a more stringent mitigation target can only be achieved at painful costs. We demonstrate that the policy implication of [Acemoglu et al. 2012] is limited in scope. Our numerical results also highlight that infrastructure provision is crucial to facilitate the low-carbon transformation.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Climate Change Economics, TU Berlin in its series Working Papers with number 1.
Length: 23 pages
Date of creation: Feb 2012
Date of revision: Feb 2012
Contact details of provider:
Web page: http://www.climatecon.tu-berlin.de/
urban form; mode choice; optimal public transit; fuel price;
Find related papers by JEL classification:
- R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion
- R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
- R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-08 (All new papers)
- NEP-ENE-2012-03-08 (Energy Economics)
- NEP-ENV-2012-03-08 (Environmental Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stéphanie Souche, 2010.
"Measuring the structural determinants of urban travel demand,"
- Souche, Stéphanie, 2010. "Measuring the structural determinants of urban travel demand," Transport Policy, Elsevier, vol. 17(3), pages 127-134, May.
- Rainald Borck & Matthias Wrede, 2007.
"Commuting Subsidies with two Transport Modes,"
CESifo Working Paper Series
1972, CESifo Group Munich.
- Sasaki, Komei, 1989. "Transportation system change and urban structure in two-transport mode setting," Journal of Urban Economics, Elsevier, vol. 25(3), pages 346-367, May.
- Glaeser, Edward L. & Kahn, Matthew E., 2010.
"The greenness of cities: Carbon dioxide emissions and urban development,"
Journal of Urban Economics,
Elsevier, vol. 67(3), pages 404-418, May.
- Edward L. Glaeser & Matthew E. Kahn, 2008. "The Greenness of Cities: Carbon Dioxide Emissions and Urban Development," NBER Working Papers 14238, National Bureau of Economic Research, Inc.
- Creutzig, Felix & McGlynn, Emily & Minx, Jan & Edenhofer, Ottmar, 2011.
"Climate policies for road transport revisited (I): Evaluation of the current framework,"
Elsevier, vol. 39(5), pages 2396-2406, May.
- Felix Creutzig & Emily McGlynn & Jan Minx & Ottmar Edenhofer, 2010. "Climate policies for road transport revisited (I): Evaluation of the current framework," Working Papers 1, Department of Climate Change Economics, TU Berlin, revised Dec 2010.
- Karathodorou, Niovi & Graham, Daniel J. & Noland, Robert B., 2010. "Estimating the effect of urban density on fuel demand," Energy Economics, Elsevier, vol. 32(1), pages 86-92, January.
- Proost, Stef & Dender, Kurt Van, 2008. "Optimal urban transport pricing in the presence of congestion, economies of density and costly public funds," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(9), pages 1220-1230, November.
- Gusdorf, Francois & Hallegatte, Stephane, 2007.
"Compact or spread-out cities: Urban planning, taxation, and the vulnerability to transportation shocks,"
Elsevier, vol. 35(10), pages 4826-4838, October.
- François Gusdorf & Stéphane Hallegatte, 2007. "Compact or Spread-Out Cities: Urban Planning, Taxation, and the Vulnerability to Transportation Shocks," Working Papers 2007.17, Fondazione Eni Enrico Mattei.
- Haring, Joseph E. & Slobko, Thomas & Chapman, Jeffrey, 1976. "The impact of alternative transportation systems on urban structure," Journal of Urban Economics, Elsevier, vol. 3(1), pages 14-30, January.
- Kim, Tschangho John, 1979. "Alternative transportation modes in an urban land use model: A general equilibrium approach," Journal of Urban Economics, Elsevier, vol. 6(2), pages 197-215, April.
- Fujita,Masahisa, 1991.
"Urban Economic Theory,"
Cambridge University Press, number 9780521396455, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Felix Creutzig) The email address of this maintainer does not seem to be valid anymore. Please ask Felix Creutzig to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.