Climate Policies and Induced Technological Change: Which to Choose, the Carrot or the Stick?
Policies to reduce emissions of greenhousegases such as CO 2 , will affect the rate andpattern of technological change in alternativeenergy supply and other production processes.Imperfections in markets for non-pollutingtechnologies imply that a decentralised economydoes not deliver a socially optimal outcome,and this could justify policy interventionssuch as subsidies. This paper considers thewelfare effects of technology subsidies as partof a carbon abatement policy package. We arguethat the presence of spillovers in alternativeenergy technologies does not necessarily implythat subsidy policies are welfare improving. Weillustrate this point in the context of ageneral equilibrium model with two forms ofcarbon-free energy, an existing “alternative energy” which is a substitute for carbon-basedfuels, and “new vintage energy” which providesa carbon-free replacement for existing energyservices. Subsidisation of alternative energyon the grounds of spillover effects can bewelfare-worsening if it crowds-out new vintagetechnologies. Copyright Kluwer Academic Publishers 2004
Volume (Year): 27 (2004)
Issue (Month): 1 (January)
|Contact details of provider:|| Web page: http://www.springerlink.com/link.asp?id=100263|
References listed on IDEAS
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.:
- Bovenberg, A.L. & Smulders, J.A., 1995.
"Environmental quality and pollution-augmenting technological change in a two-sector endogenous growth model,"
Other publications TiSEM
6784bb12-71fb-45a5-bf7e-8, Tilburg University, School of Economics and Management.
- Lans Bovenberg, A. & Smulders, Sjak, 1995. "Environmental quality and pollution-augmenting technological change in a two-sector endogenous growth model," Journal of Public Economics, Elsevier, vol. 57(3), pages 369-391, July.
- 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.
- Marc Baudry, 2000. "Joint Management of Emission Abatement and Technological Innovation for Stock Externalities," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 16(2), pages 161-183, June.
- Gustavsson, Patrik & Hansson, Par & Lundberg, Lars, 1999.
"Technology, resource endowments and international competitiveness,"
European Economic Review,
Elsevier, vol. 43(8), pages 1501-1530, August.
- Gustavsson, Patrik & Hansson, Pär & Lundberg, Lars, 1996. "Technology, Resource Endowments and International Competitiveness," Working Paper Series 138, Trade Union Institute for Economic Research.
- Rutherford, Thomas F, 1999. "Applied General Equilibrium Modeling with MPSGE as a GAMS Subsystem: An Overview of the Modeling Framework and Syntax," Computational Economics, Society for Computational Economics, vol. 14(1-2), pages 1-46, October.
- Adam Jaffe & Richard Newell & Robert Stavins, 2002. "Environmental Policy and Technological Change," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 22(1), pages 41-70, June.
- van der Zwaan, B. C. C. & Gerlagh, R. & G. & Klaassen & Schrattenholzer, L., 2002. "Endogenous technological change in climate change modelling," Energy Economics, Elsevier, vol. 24(1), pages 1-19, January.
- Chakravorty, Ujjayant & Roumasset, James & Tse, Kinping, 1997. "Endogenous Substitution among Energy Resources and Global Warming," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1201-34, December.
- Snorre Kverndokk & Lars Lindholt & Knut Rosendahl, 2000.
"Stabilization of CO 2 concentrations: mitigation scenarios using the Petro model,"
Environmental Economics and Policy Studies- The Official Journal of the Society for Environmental Economics and Policy Studies / The Official Journal of the East Asian Association of Environmental and,
Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 3(2), pages 195-224, June.
- Snorre Kverndokk & Lars Lindholt & Knut Einar Rosendal, 2000. "Stabilisation of CO2 concentrations: Mitigation scenarios using the Petro model," Discussion Papers 267, Statistics Norway, Research Department.
- Bye, Brita, 2000. "Environmental Tax Reform and Producer Foresight: An Intertemporal Computable General Equilibrium Analysis," Journal of Policy Modeling, Elsevier, vol. 22(6), pages 719-752, November.
- Grubler, Arnulf & Nakicenovic, Nebojsa & Victor, David G., 1999. "Dynamics of energy technologies and global change," Energy Policy, Elsevier, vol. 27(5), pages 247-280, May.
- James R. Markusen, 1990. "Micro-foundations of External Economies," Canadian Journal of Economics, Canadian Economics Association, vol. 23(3), pages 495-508, August.
- Bovenberg, A.L. & Smulders, J.A., 1993.
"Environmental quality and pollution-saving technological change in a two-sector endogenous growth model,"
1993-21, Tilburg University, Center for Economic Research.
- Bovenberg, A.L. & Smulders, S., 1993. "Environmental Quality and Pollution-Saving Technological Change in Two- Sector Endogenous Growth Model," Papers 9321, Tilburg - Center for Economic Research.
- Grubler, Arnulf & Messner, Sabine, 1998. "Technological change and the timing of mitigation measures," Energy Economics, Elsevier, vol. 20(5-6), pages 495-512, December.
When requesting a correction, please mention this item's handle: RePEc:kap:enreec:v:27:y:2004:i:1:p:21-41. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
If references are entirely missing, you can add them using this form.