Climate change mitigation policies : Are R&D subsidies preferable to a carbon tax ?
We consider a general equilibrium climate change model with two endogenous R&Dsectors. First, we characterize the set of decentralized equilibria : to each vector of publictools – a carbon tax and a subsidy to each R&D sector – is associated a particularequilibrium. Second, we compute the optimal tools. Third, we perform various second-best analysis by imposing some constraints on one or several policy. The main resultsof the paper are the following : i) both a carbon tax and a green research subsidycontribute to the climate change mitigation ; ii) R&D subsidies have a large impact onthe consumption, and then on the social welfare, as compared with the carbon tax usedalone ; iii) those subsidies allow to spare the earlier generations who are, on the otherhand, penalized by a carbon tax.
Volume (Year): 118 (2008)
Issue (Month): 6 ()
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