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The Unilateral Implementation of a Sustainable Growth Path with Directed Technical Change

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  • Inge van den Bijgaart

    (Tilburg University (The Netherlands))

Abstract

We determine the core characteristics of a climate coalition’s optimal policies in a dynamic two country directed technical change framework. Unilateral policies alter the structure of production and thereby innovation incentives across countries. Whenever feasible, optimal policies implement sustainable growth by directing global innovation to the nonpolluting sector. If nonparticipants drive global innovation, this requires policies relocating clean production to nonparticipants. A calibration exercise suggests that the US or EU alone are too small to implement sustainable growth. A coalition of Annex I countries that signed the Kyoto protocol can implement sustainable growth, yet required tax rates are very high.

Suggested Citation

  • Inge van den Bijgaart, 2015. "The Unilateral Implementation of a Sustainable Growth Path with Directed Technical Change," Working Papers 2015.11, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2015.11
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    References listed on IDEAS

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    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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