Promoting alternative, environmentally friendly passenger transport technologies: Directed technological change in a bottom-up/top-down CGE model
AbstractThis paper evaluates policy options that foster the progress of alternative, environmentally friendly passenger transport technologies in order to reduce greenhouse gas emissions viable technological switch. For the example of Austria, we develop a dynamic computable general equilibrium model which explicitly considers passenger transport technologies comprising "internal combustion engine” (ICE), “plug-in hybrid electric vehicle” (PHEV), “electric vehicle” (EV) and “fuel cell electric vehicle” (FCEV). Regarding technological progress we also incorporate labor augmenting, directed technological change. For policy analysis, we study the effects of (i) a phase out of ICE and subsidy in R&D, (ii) a fuel tax and subsidy in R&D and (iii) an output subsidy on FCEV. We find that in terms of overall emission reduction, in the given time scale from 2005 to 2050, the continuous phase-out of ICE in combination with a subsidy in R&D is the most effective policy measure. The fuel tax in combination with a subsidy in R&D shows the smallest emission reduction. However, in terms of costs, impacts on consumption of private goods are the smallest among all policy instruments. Moreover, domestic output of economic sectors is boosted. Finally, results show, that the competitiveness of FCEV implies a considerable fall in emissions and favors production of several economic sectors, such as electrical machinery and chemical products. However, in order to ensure competitiveness the output subsidy on FCEV is extremely high, impacting private consumption strongly.
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Bibliographic InfoPaper provided by University of Graz, Department of Economics in its series Graz Economics Papers with number 2013-02.
Date of creation: Feb 2013
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Find related papers by JEL classification:
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O38 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Government Policy
- Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-02 (All new papers)
- NEP-CMP-2013-03-02 (Computational Economics)
- NEP-ENE-2013-03-02 (Energy Economics)
- NEP-ENV-2013-03-02 (Environmental Economics)
- NEP-INO-2013-03-02 (Innovation)
- NEP-TRE-2013-03-02 (Transport Economics)
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