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Restricted carbon emissions and directed R&D support; an applied general equilibrium analysis

Listed author(s):
  • Bye, Brita
  • Jacobsen, Karl
Registered author(s):

    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 (CCS). We study public revenue neutral policy alternatives targeted towards general R&D and CCS R&D. Support to general R&D is the welfare superior. However, the welfare gap between the two R&D policy alternatives is reduced with higher carbon tax levels. For sufficiently high levels of the carbon tax equal subsidy rates are preferred.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0140-9883(10)00233-1
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    Article provided by Elsevier in its journal Energy Economics.

    Volume (Year): 33 (2011)
    Issue (Month): 3 (May)
    Pages: 543-555

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    Handle: RePEc:eee:eneeco:v:33:y:2011:i:3:p:543-555
    Contact details of provider: Web page: http://www.elsevier.com/locate/eneco

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