Climate Policy, Technology Choice, and Multiple Equilibria in A Developing Economy
Control of carbon dioxide emissions in developing countries is becoming a key issue in the international climate policy. A critical element for achieving substantial emission reduction in those countries is the installment of new energy technologies. Drawing on the framework of poverty-trap models in development economics, we discuss how climate policy affects the transition of energy technologies in a developing economy. We show that while a moderate carbon policy could promote transition to low-emission energy technology, too stringent policy in a relatively poor economy may rather hinder the process by reducing the economy’s financing capacity as to building new energy infrastructure – there, the barrier is not the long-run costs of the new technology but the availability of financial resources for initial investment, which could be constrained not only by the domestic saving but also by the imperfection of credit market. The possibility of such a trapping may provide a justification for financial support towards the deployment of alternative energy technologies in low-income economies
|Date of creation:||Jan 2010|
|Date of revision:|
|Contact details of provider:|| Postal: Kiellinie 66, D-24105 Kiel|
Phone: +49 431 8814-1
Fax: +49 431 85853
Web page: http://www.ifw-kiel.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Murphy, Kevin M. & Shleifer, Andrei & Vishny, Robert W., 1989.
"Industrialization and the Big Push,"
3606235, Harvard University Department of Economics.
- Oded Galor & Joseph Zeira, 1993.
"Income Distribution and Macroeconomics,"
Review of Economic Studies,
Oxford University Press, vol. 60(1), pages 35-52.
- CHAKRAVORTY Ujjayant & MOREAUX Michel & TIDBALL Mabel, 2006.
"Ordering the Extraction of Polluting Nonrenewable Resources,"
LERNA Working Papers
06.19.212, LERNA, University of Toulouse.
- Ujjayant Chakravorty & Michel Moreaux & Mabel Tidball, 2008. "Ordering the Extraction of Polluting Nonrenewable Resources," American Economic Review, American Economic Association, vol. 98(3), pages 1128-44, June.
- Chakravorty, Ujjayant & Moreaux, Michel & Tidball, Mabel, 2006. "Ordering the Extraction of Polluting Nonrenewable Resources," IDEI Working Papers 415, Institut d'Économie Industrielle (IDEI), Toulouse.
- Kiminori Matsuyama, 2004.
"Financial Market Globalization, Symmetry-Breaking, and Endogenous Inequality of Nations,"
Econometric Society, vol. 72(3), pages 853-884, 05.
- Kiminori Matsuyama, 2002. "Financial Market Globalization, Symmetry-Breaking, and Endogenous Inequality of Nations," CIRJE F-Series CIRJE-F-186, CIRJE, Faculty of Economics, University of Tokyo.
- Edwin van der Werf & Sjak Smulders, 2007.
"Climate Policy and the Optimal Extraction of High- and Low-Carbon Fossil Fuels,"
2007.83, Fondazione Eni Enrico Mattei.
- Sjak Smulders & Edwin van der Werf, 2008. "Climate policy and the optimal extraction of high- and low-carbon fossil fuels," Canadian Journal of Economics, Canadian Economics Association, vol. 41(4), pages 1421-1444, November.
- Smulders, J.A. & van der Werf, E.H., 2005. "Climate Policy and the Optimal Extraction of High- and Low-Carbon Fossil Fuels," Discussion Paper 2005-119, Tilburg University, Center for Economic Research.
- Tsur, Yacov & Zemel, Amos, 2009. "Market Structure and the Penetration of Alternative Energy Technologies," Discussion Papers 47174, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
- Yacov Tsur & Amos Zemel, 2008. "Regulating environmental threats," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 39(3), pages 297-310, March.
- Azariadis, Costas & Stachurski, John, 2005.
Handbook of Economic Growth,
in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 5
- World Bank, 2010. "World Development Report 2010," World Bank Publications, The World Bank, number 4387, August.
- Iwaisako, Tatsuro, 2002. "Technology choice and patterns of growth in an overlapping generations model," Journal of Macroeconomics, Elsevier, vol. 24(2), pages 211-231, June.
- Requate, Till & Unold, Wolfram, 2003. "Environmental policy incentives to adopt advanced abatement technology:: Will the true ranking please stand up?," European Economic Review, Elsevier, vol. 47(1), pages 125-146, February.
When requesting a correction, please mention this item's handle: RePEc:kie:kieliw:1590. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dieter Stribny)
If references are entirely missing, you can add them using this form.