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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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    Cited by:

    1. Lamperti, Francesco & Napoletano, Mauro & Roventini, Andrea, 2020. "Green Transitions And The Prevention Of Environmental Disasters: Market-Based Vs. Command-And-Control Policies," Macroeconomic Dynamics, Cambridge University Press, vol. 24(7), pages 1861-1880, October.
    2. Chiara Ravetti & Tania Theoduloz & Giulia Valacchi, 2020. "Buy Coal or Kick-Start Green Innovation? Energy Policies in an Open Economy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(1), pages 95-126, September.
    3. Jan Witajewski-Baltvilks & Carolyn Fischer, 2018. "Green Innovation And Economic Growth In A North-South Model," IBS Working Papers 10/2018, Instytut Badan Strukturalnych.
    4. Peter K. Kruse-Andersen, 2016. "Directed Technical Change and Economic Growth Effects of Environmental Policy," Discussion Papers 16-06, University of Copenhagen. Department of Economics.
    5. Oladi, Reza & Caplan, Arthur J. & Gilbert, John, 2018. "Sequestration and the engagement of developing economies in a global carbon market," Resource and Energy Economics, Elsevier, vol. 52(C), pages 50-63.
    6. Hillebrand, Elmar & Hillebrand, Marten, 2019. "Optimal climate policies in a dynamic multi-country equilibrium model," Journal of Economic Theory, Elsevier, vol. 179(C), pages 200-239.
    7. Peter K. Kruse-Andersen, 2019. "Directed Technical Change, Environmental Sustainability, and Population Growth," Discussion Papers 19-12, University of Copenhagen. Department of Economics.
    8. Wiskich, Anthony, 2021. "A comment on innovation with multiple equilibria and "The environment and directed technical change"," Energy Economics, Elsevier, vol. 94(C).

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    More about this item

    Keywords

    Sustainable Growth; Technical Change; Innovation;
    All these keywords.

    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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