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On general versus emission saving R&D support

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    Abstract

    We analyse welfare effects of supporting general versus emission saving technological development when carbon emissions are regulated by a carbon tax. We use a computable general equilibrium model with induced technological change (ITC). ITC is driven by two separate, economically motivated research and development (R&D) activities, one general and one emission saving specified as carbon capture and storage. We study public revenue neutral policy alternatives targeted towards general R&D and emission saving R&D. Support to general R&D is the welfare superior, independent of the level of international carbon price. However, the welfare gap between the two R&D policy alternatives is reduced if the carbon price increases.

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    Bibliographic Info

    Paper provided by Research Department of Statistics Norway in its series Discussion Papers with number 584.

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    Date of creation: May 2009
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    Handle: RePEc:ssb:dispap:584

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    Keywords: Applied general equilibrium; Endogenous growth; Research and Development; Directed technological change; Carbon policy;

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    15. Tom-Reiel Heggedal & Karl Jacobsen, 2008. "Timing of innovation policies when carbon emissions are restricted: an applied general equilibrium analysis," Discussion Papers 536, Research Department of Statistics Norway.
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