Climate policies and induced technological change: Impacts and timing of technology subsidies
AbstractWe study the role of technology subsidies in climate policies, using a simple dynamic equilibrium model with learning-by-doing. The optimal subsidy rate of a carbon-free technology is high when the technology is first adopted, but falls significantly over the next decades. However, the efficiency costs of uniform instead of optimal subsidies, may be low if there are introduction or expansion constraints for a new technology. Finally, supporting existing energy technologies only, may lead to technology lock-in, and the impacts of lock-in increase with the learning potential of new technologies as well as the possibilities for early entry and thight carbon constraints.
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Bibliographic InfoPaper provided by Oslo University, Department of Economics in its series Memorandum with number 05/2004.
Length: 34 pages
Date of creation: 29 Apr 2004
Date of revision:
Contact details of provider:
Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
Web page: http://www.oekonomi.uio.no/indexe.html
More information through EDIRC
Climate change policies; Computable equilibrium models; Induced technological change; Subsidies; Timing.;
Find related papers by JEL classification:
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-05-02 (All new papers)
- NEP-ENE-2004-05-02 (Energy Economics)
- NEP-INO-2004-05-02 (Innovation)
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