The Optimal Timing of Adoption of a Green Technology
We study the optimal timing of adoption of a cleaner technology and its effects on the rate of growth of an economy in the context of an AK endogenous growth model. We show that the results depend upon the behavior of the marginal utility of environmental quality with respect to consumption. When it is increasing, we derive the capital level at the optimal timing of adoption. We show that this capital threshold is independent of the initial conditions on the stock of capital, implying that capital-poor countries tend to take longer to adopt. Also, country-specific characteristics, as the existence of high barriers to adoption, may lead to different capital thresholds for different countries. If the marginal utility of environmental quality decreases with consumption, a country should never delay adoption; the optimal policy is either to adopt immediately or, if adoption costs are “too high”, to never adopt. The policy implications of these results are discussed in the context of the international debate surrounding the environmental political agenda. Copyright Springer Science+Business Media, Inc. 2007
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 36 (2007)
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.:
- Aubhik Khan & B. Ravikumar, 2002.
"Costly Technology Adoption and Capital Accumulation,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 5(2), pages 489-502, April.
- Khan, A. & Ravikumar, B., 1997. "Costly Technology Adoption and Capital Accumulation," Working Papers 97-12, University of Iowa, Department of Economics.
- Aubhik Khan & B. Ravikumar, 1998. "Costly Technology Adoption and Capital Accumulation," Development and Comp Systems 9802001, EconWPA.
- Aubhik Khan & B. Ravikumar, 2000. "Costly technology adoption and capital accumulation," Working Papers 00-7, Federal Reserve Bank of Philadelphia.
- Brock, William A. & Taylor, M. Scott, 2005.
"Economic Growth and the Environment: A Review of Theory and Empirics,"
Handbook of Economic Growth,
in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 28, pages 1749-1821
- William A. Brock & M. Scott Taylor, 2004. "Economic Growth and the Environment: A Review of Theory and Empirics," NBER Working Papers 10854, National Bureau of Economic Research, Inc.
- Stokey, Nancy L, 1998. "Are There Limits to Growth?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(1), pages 1-31, February.
- Jeremy Greenwood & Boyan Jovanovic, 1998.
"Accounting for Growth,"
NBER Working Papers
6647, National Bureau of Economic Research, Inc.
- Elbasha, Elamin H. & Roe, Terry L., 1995.
"On Endogenous Growth: The Implications of Environmental Externalities,"
7493, University of Minnesota, Economic Development Center.
- Elbasha, Elamin H. & Roe, Terry L., 1996. "On Endogenous Growth: The Implications of Environmental Externalities," Journal of Environmental Economics and Management, Elsevier, vol. 31(2), pages 240-268, September.
- Parente Stephen L., 1994. "Technology Adoption, Learning-by-Doing, and Economic Growth," Journal of Economic Theory, Elsevier, vol. 63(2), pages 346-369, August.
- Paul M. Romer, 1993.
"New Goods, Old Theory, and the Welfare Costs of Trade Restrictions,"
NBER Working Papers
4452, National Bureau of Economic Research, Inc.
- Romer, Paul, 1994. "New goods, old theory, and the welfare costs of trade restrictions," Journal of Development Economics, Elsevier, vol. 43(1), pages 5-38, February.
- W.A. Brock & M. Scott Taylor, 2003.
"The Kindergarten Rule of Sustainable Growth,"
- M. Scott Taylor & William A. Brock, 2014. "The Kindergarten Rule of Sustainable Growth," Working Papers 2014-70, Department of Economics, University of Calgary, revised 29 Sep 2014.
- Brock,W.A. & Taylor,M.S., 2003. "The kindergarten rule of sustainable growth," Working papers 8, Wisconsin Madison - Social Systems.
- William A. Brock & M. Scott Taylor, 2003. "The Kindergarten Rule of Sustainable Growth," NBER Working Papers 9597, National Bureau of Economic Research, Inc.
- Brock,W.A. & Taylor,M.S., 2004.
"The Green Solow model,"
16, Wisconsin Madison - Social Systems.
- Hall, Bronwyn H. & Khan, Beethika, 2003.
"Adoption of New Technology,"
Department of Economics, Working Paper Series
qt3wg4p528, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Philippe Michel & Gilles Rotillon, 1995. "Disutility of pollution and endogenous growth," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 6(3), pages 279-300, October.
- 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.
- 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.
- Balvers, Ronald J. & H. Bergstrand, Jeffrey, 1997. "Equilibrium real exchange rates: closed-form theoretical solutions and some empirical evidence," Journal of International Money and Finance, Elsevier, vol. 16(3), pages 345-366, June.
- Reis, Ana Balcao, 2001. "Endogenous Growth and the Possibility of Eliminating Pollution," Journal of Environmental Economics and Management, Elsevier, vol. 42(3), pages 360-373, November.
When requesting a correction, please mention this item's handle: RePEc:kap:enreec:v:36:y:2007:i:1:p:35-55. 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.