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Learning-by-doing and the Costs of a Backstop for Energy Transition and Sustainability

  • Pierre-André Jouvet

    (EconomiX - UPOND - Université Paris Ouest Nanterre La Défense - CNRS - Centre National de la Recherche Scientifique)

  • Ingmar Schumacher

    (Department of Economics, Ecole Polytechnique - Polytechnique - X - CNRS - Centre National de la Recherche Scientifique, Banque Centrale du Luxembourg)

We assess the impact of being able to substitute an unlimited but costly energy substitute (like wind, solar) for a non-renewable resource (like oil, coal) in a model of sustainable growth. The prospects for sustainability on the optimal path depend crucially on the costs of this substitute.Furthermore, the poorer a country, measured in terms of capital stock at a given point in time, the later it should switch to the renewable substitute, and the more likely it will be unsustainable. Taking learning-by-doing in account, we find that this leads to an earlier switching time but does not guarantee sustainability.

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Date of creation: 03 Nov 2011
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Handle: RePEc:hal:wpaper:hal-00637960
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