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R&D-driven Biases in Energy-Saving Technical Change: A "Putty-Practically-Clay" Approach

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  • Adriaan van Zon
  • Thomas S. Lontzek

Abstract

In the past years biofuels have received increased attention since they were believed to contribute to rural development, energy security and to fight global warming. It became also clear, though, that bioenergy cannot be evaluated independently of the rest of the economy and that national and international feedback effects are important. Computable general equilibrium (CGE) models have been widely employed in order to study the effects of international climate policies. The main characteristic of these models is their encompassing scope: Global models cover the whole world economy disaggregated into regions and countries as well as diverse sectors of economic activity. Such a modelling framework unveils direct and indirect feedback effects of certain policies or shocks across sectors and countries. CGE models are thus well suited for the study of bioenergy/biofuel policies. One can currently find various approaches in the literature of incorporating bioenergy into a CGE framework. This paper intends to give an overview of existing approaches and to critically assess their respective power. Grouping different approaches into categories and highlighting their advantages and disadvantages is important for giving a structure to this rather recent and rapidly growing research area and to provide a guidepost for future work

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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1474.

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Length: 39 pages
Date of creation: Dec 2008
Date of revision:
Handle: RePEc:kie:kieliw:1474

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Keywords: Induced biased technological change; Putty-clay Vintage Models; Energy; Renewable resources;

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  1. Charles I. Jones, 2005. "The Shape of Production Functions and the Direction of Technical Change," The Quarterly Journal of Economics, MIT Press, vol. 120(2), pages 517-549, May.
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