What Really Matters: Discounting, Technological Change and Sustainable Climate
AbstractThis paper discusses the interplay between the choice of the discount rate, greenhouse gas mitigation and endogenous technological change. Neglecting the issue of uncertainty it is shown that the green golden rule stock of atmospheric carbon is uniquely determined, but is not affected by technological change. More general it is shown analytically within the framework of a reduced model of integrated assessment that optimal stationary stocks of atmospheric carbon depend on the choice of the discount rate, but are independent of the stock of technological knowledge. These results are then reinforced numerically in a fully specified integrated assessment analysis.
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Bibliographic InfoPaper provided by Universitaet Bern, Departement Volkswirtschaft in its series Diskussionsschriften with number dp1008.
Date of creation: May 2010
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Integrated Assessment; discount rate; endogenous technological change; climate change;
Find related papers by JEL classification:
- Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-04 (All new papers)
- NEP-CMP-2010-06-04 (Computational Economics)
- NEP-DGE-2010-06-04 (Dynamic General Equilibrium)
- NEP-ENE-2010-06-04 (Energy Economics)
- NEP-ENV-2010-06-04 (Environmental Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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"Increased energy efficiency and the rebound effect: Effects on consumption and emissions,"
Elsevier, vol. 29(1), pages 1-17, January.
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