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Does Endogenous Technical Change Make a Difference in Climate Policy Analysis? A Robustness Exercise with the FEEM-RICE Model

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Author Info

  • Marzio Galeotti

    (Università di Milano and Fondazione Eni Enrico Mattei)

  • Carlo Carraro

    (Università di Venezia and Fondazione Eni Enrico Mattei)

Abstract

Technical change is generally considered the key to the solution of environmental problems, in particular global phenomena like climate change. Scientists differ in their views on the thaumaturgic virtues of technical change. There are those who are confident that pollution-free technologies will materialize at some time in the future and will prevent humans from suffering the catastrophic consequences of climate change. Others believe that there are inexpensive technologies already available and argue the case for no-regret adoption policies (e.g. subsidies). Others again believe that the process of technological change responds to economic stimuli. These economic incentives to technological innovation are provided not only by forces that are endogenous to the economic system, but also by suitably designed environmental and innovation policies. In this paper, we consider and translate into analytical counterparts these different views of technical change. We then study alternative formulations of technical change and, with the help of a computerized climate-economy model, carry out a number of optimization runs in order to assess what type of technical change plays a role (assuming it does) in the evaluation of the impact of climate change and of the policies designed to cope with it.

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Bibliographic Info

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2004.152.

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Date of creation: Dec 2004
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Handle: RePEc:fem:femwpa:2004.152

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Related research

Keywords: Climate policy; Environmental modeling; Integrated assessment; Technical change;

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References

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  1. Valentina Bosetti & Carlo Carraro & Marzio Galeotti, 2005. "The Dynamics of Carbon and Energy Intensity in a Model of Endogenous Technical Change," Working Papers 2005.6, Fondazione Eni Enrico Mattei.
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Citations

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Cited by:
  1. Valentina Bosetti & Carlo Carraro & Marzio Galeotti, 2005. "The Dynamics of Carbon and Energy Intensity in a Model of Endogenous Technical Change," Working Papers 2005.6, Fondazione Eni Enrico Mattei.
  2. Valentina Bosetti & Marzio Galeotti & Alessandro Lanza, 2004. "How Consistent are Alternative Short-Term Climate Policies with Long-Term Goals?," Working Papers 2004.157, Fondazione Eni Enrico Mattei.
  3. Maria Fröling, 2011. "Energy use, population and growth, 1800–1970," Journal of Population Economics, Springer, vol. 24(3), pages 1133-1163, July.
  4. Valentina Bosetti & Carlo Carraro & Marzio Galeotti, 2006. "Stabilisation Targets, Technical Change and the Macroeconomic Costs of Climate Change Control," Working Papers 2006.2, Fondazione Eni Enrico Mattei.
  5. Bosetti, Valentina & Carraro, Carlo & Massetti, Emanuele, 2009. "Banking permits: Economic efficiency and distributional effects," Journal of Policy Modeling, Elsevier, vol. 31(3), pages 382-403, May.

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