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Human capital formation and global warming mitigation: evidence from an integrated assessment model

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  • Carlo Carraro

    ()
    (Department of Economics, University Of Venice Cà Foscari)

  • Enrica De Cian

    ()
    (University of Venice, Fondazione Enrico Mattei)

  • Massimo Tavoni

    ()
    (Princeton University, and Fondazione Enrico Mattei)

Abstract

Whereas the linkage between technology and climate policy has been extensively analysed, the interaction between climate policies and human capital formation has received considerably less attention. Human capital is a determinant of economic growth and, at the same time, it affects the efficiency of responses to climate change. Based on recent empirical evidence, this paper includes human capital and knowledge in a state-of-the art integrated assessment model. Introducing human capital makes it possible to assess the interplay between innovation, human capital, climate change, and education policies. Results indicate that climate policy stimulates a dedicated form of energy-knowledge without reducing generic R&D investments. Since advancements in labour productivity have a negative impact on the environment because labour is assumed to be complement to energy, climate policy reduces education investments, on which human capital is built. However, inspection of a policy mix combining climate and education targets shows that education and climate goals can be coupled incurring in small additional economic penalties. We thus provide evidence that apparently opposing policy goals can and should be pursued together. We also provide a preliminary investigation of knowledge stimulating education.

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Bibliographic Info

Paper provided by Department of Economics, University of Venice "Ca' Foscari" in its series Working Papers with number 2009_30.

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Length: 26
Date of creation: 2009
Date of revision:
Handle: RePEc:ven:wpaper:2009_30

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Keywords: Climate Policy; Innovation; Human capital;

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  1. Goulder, Lawrence H. & Schneider, Stephen H., 1999. "Induced technological change and the attractiveness of CO2 abatement policies," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 211-253, August.
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  17. Enrica De Cian, 2009. "Factor-Augmenting Technical Change: An Empirical Assessment," Working Papers 2009.18, Fondazione Eni Enrico Mattei.
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Cited by:
  1. Alfredo Marvão Pereira & Rui M. Pereira, 2012. "DGEP - A Dynamic General Equilibrium Model of the Portuguese Economy: Model Documentation," Working Papers 127, Department of Economics, College of William and Mary.
  2. Alfredo Marvão Pereira & Rui M. Pereira, 2011. "On the environmental, economic and budgetary impacts of fossil fuel prices: A dynamic general equilibrium analysis of the Portuguese case," Working Papers 110, Department of Economics, College of William and Mary.
  3. Alfredo Marvão Pereira & Rui M. Pereira, 2012. "Fossil Fuel Prices and the Economic and Budgetary Challenges of a Small Energy-Importing Economy: The Case of Portugal," Working Papers 115, Department of Economics, College of William and Mary.
  4. Alfredo Marvão Pereira & Rui M. Pereira, 2014. "What is it going to take to achieve 2020 Emission Targets? Marginal abatement cost curves and the budgetary impact of CO2 taxation in Portugal (," Working Papers 105, Department of Economics, College of William and Mary.
  5. Alfredo Marvão Pereira & Rui M. Pereira, 2013. "Environmental Fiscal Reform and Fiscal Consolidation: The Quest for the Third Dividend in Portugal," Working Papers 114, Department of Economics, College of William and Mary.
  6. Everett, Tim & Ishwaran, Mallika & Ansaloni, Gian Paolo & Rubin, Alex, 2010. "Economic growth and the environment," MPRA Paper 23585, University Library of Munich, Germany.
  7. Enrica De Cian & Carlo Carraro & Lea Nicita, 2010. "Modeling Biased Technical Change. Implications for Climate Policy," Working Papers 2010.4, Fondazione Eni Enrico Mattei.

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