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“The Voracity Effect” and Climate Change: The Impact of Clean Technologies

  • Hassan Benchekroun

    (Department of Economics, CIREQ McGill University)

  • Amrita Ray Chaudhuri

    (Department of Economics, CentER and TILEC Tilburg University)

We show that a technological breakthrough that reduces CO2 emissions per output can exacerbate the climate change problem: countries may respond by raising their emissions resulting in an increase of the stock of pollution that may reduce welfare. Using parameter values based on empirical evidence we obtain that any 'new technology' that reduces the emissions of CO2 per dollar of GDP by less than 76% from their current level is welfare reducing. Developing clean technologies as well as transferring “cleaner” technologies to developing countries make a global post-Kyoto agreement over the control of emissions all the more urgent.

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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2011.05.

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Date of creation: Jan 2011
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Handle: RePEc:fem:femwpa:2011.05
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