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Designing an Optimal 'Tech Fix' Path to Global Climate Stability: Directed R&D and Embodied Technical Change in a Multi-phase Framework

Author

Listed:
  • Paul David

    () (Stanford University)

  • Adriaan van Zon

    () (United Nations University)

Abstract

The research reported here gives priority to understanding the inter-temporal resource allocation requirements of a program of technological changes that could halt global warming by completing the transition to a "green" (zero net CO2- emission) production regime within the possibly brief finite interval that remains before Earth's climate is driven beyond a catastrophic tipping point. This paper formulates a multi-phase, just-in-time transition model incorporating carbon-based and carbon-free technical options requiring physical embodiment in durable production facilities, and having performance attributes that are amenable to enhancement by directed R&D expenditures. Transition paths that indicate the best ordering and durations of the phases in which intangible and tangible capital formation is taking place, and capital stocks of different types are being utilized in production, or scrapped when replaced types embodying socially more efficient technologies, are obtained from optimizing solutions for each of a trio of related models that couple the global macro-economy's dynamics with the dynamics of the climate system. They describe the flows of consumption, CO2 emissions and the changing atmospheric concentration of greenhouse gas (which drives global warming), along with the investment dynamics required for the timely transformation of the production regime.

Suggested Citation

  • Paul David & Adriaan van Zon, 2013. "Designing an Optimal 'Tech Fix' Path to Global Climate Stability: Directed R&D and Embodied Technical Change in a Multi-phase Framework," Discussion Papers 12-029, Stanford Institute for Economic Policy Research.
  • Handle: RePEc:sip:dpaper:12-029
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    File URL: http://www-siepr.stanford.edu/repec/sip/12-029.pdf
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    References listed on IDEAS

    as
    1. Valente, Simone, 2011. "Endogenous Growth, Backstop Technology Adoption, And Optimal Jumps," Macroeconomic Dynamics, Cambridge University Press, vol. 15(3), pages 293-325, June.
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    Cited by:

    1. Lennox, James A. & Witajewski-Baltvilks, Jan, 2017. "Directed technical change with capital-embodied technologies: Implications for climate policy," Energy Economics, Elsevier, vol. 67(C), pages 400-409.

    More about this item

    Keywords

    global warming; tipping point; catastrophic climate instability; extreme weather†related damages; R&D; directed technical change; capital†embodied technologies; optimal sequencing; multi†phase optimal control; sustainable endogenous growth;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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