Modeling technological change in economic models of climate change: A survey
AbstractThe assessment of climate change mitigation policies through economic modeling depends crucially on assumptions under which technological change has been incorporated in the model. Earlier climate-energy-economics modeling attempts heavily relied on the assumption of exogenous technological change. In this case, technological change is a function solely of time. However, such an approach seems insufficient, especially given developments in other fields of economic research that have helped to explain in more detail the process of technological change. A lot of research has been done hence on endogenizing technological change in large-scale models. The purpose of this paper is to summarize these efforts. We describe different model types and their treatment of exogenous technological change (autonomous energy efficiency improvements and backstop technologies) and endogenous technological change (including price inducement, learning-by-doing, investments in R & D and directed technical change). We conclude with some open questions and suggestions for future research. --
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Bibliographic InfoPaper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 13-007.
Date of creation: 2013
Date of revision:
Exogenous Technical Change; Endogenous Technological Change; Price inducement; Learning-by-doing; Directed Technical Change; Modeling;
Find related papers by JEL classification:
- C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-02 (All new papers)
- NEP-ENE-2013-03-02 (Energy Economics)
- NEP-ENV-2013-03-02 (Environmental Economics)
- NEP-KNM-2013-03-02 (Knowledge Management & Knowledge Economy)
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