Directed Technical Change and Climate Policy
| dc.creator | Otto, Vincent M. | |
| dc.creator | Loschel, Andreas | |
| dc.creator | Reilly, John M. | |
| dc.date | 2017-04-01T14:08:35Z | |
| dc.date.accessioned | 2026-07-09T03:03:13Z | |
| dc.description | This paper studies the cost effectiveness of climate policy if there are technology externalities. For this purpose, we develop a forward-looking CGE model that captures empirical links between CO2 emissions associated with energy use, directed technical change and the economy. We find the cost-effective climate policy to include a combination of R&D subsidies and CO2 emission constraints, although R&D subsidies raise the shadow value of the CO2 constraint (i.e. CO2 price) because of a strong rebound effect from stimulating innovation. Furthermore, we find that CO2 constraints differentiated toward CO2-intensive sectors are more cost effective than constraints that generate uniform CO2 prices among sectors. Differentiated CO2 prices, through technical change and concomitant technology externalities, encourage growth in the non-CO2 intensive sectors and discourage growth in CO2-intensive sectors. Thus, it is cost effective to let the latter bear relatively more of the abatement burden. This result is robust to whether emission constraints, R&D subsidies or combinations of both are used to reduce CO2 emissions. | |
| dc.identifier | doi:10.22004/ag.econ.12037 | |
| dc.identifier | https://ageconsearch.umn.edu/record/12037/files/wp060081.pdf | |
| dc.identifier | http://ageconsearch.umn.edu/record/12037 | |
| dc.identifier.uri | http://hdl.handle.net/123456789/525594 | |
| dc.language | eng | |
| dc.publisher | ||
| dc.source | http://ageconsearch.umn.edu/record/12037 | |
| dc.title | Directed Technical Change and Climate Policy | |
| dc.type | Text |