Induced innovation in a decentralized model of climate change
We propose a model of climate change consistent with four principal stylized facts. First, the benefits and costs of climate change mitigation policies are not evenly distributed across generations. Second, capital accumulation is not determined jointly with emissions policy, but rather as a choice made by self-interested economic agents. Third, most research and development activity in the energy sector is undertaken by private firms. Fourth, significant imperfections exist in the market for technology. The model is calibrated to match global trends in GWP, energy production, and investment in research and development, and is used for the evaluation of policies including research and development subsidies and carbon taxes.
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- Gerlagh, Reyer & Lise, Wietze, 2005. "Carbon taxes: A drop in the ocean, or a drop that erodes the stone? The effect of carbon taxes on technological change," Ecological Economics, Elsevier, vol. 54(2-3), pages 241-260, August.
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- Leach, Andrew J., 2009. "The welfare implications of climate change policy," Journal of Environmental Economics and Management, Elsevier, vol. 57(2), pages 151-165, March.
- Reyer Gerlagh, 2003. "Induced Technological Change under Technology Competition," Working Papers 2003.5, Fondazione Eni Enrico Mattei.
- Popp, David, 2004. "ENTICE: endogenous technological change in the DICE model of global warming," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 742-768, July.
- David Popp, 2004. "ENTICE-BR: The Effects of Backstop Technology R&D on Climate Policy Models," NBER Working Papers 10285, National Bureau of Economic Research, Inc.
- Buonanno, Paolo & Carraro, Carlo & Galeotti, Marzio, 2003. "Endogenous induced technical change and the costs of Kyoto," Resource and Energy Economics, Elsevier, vol. 25(1), pages 11-34, February.
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