General Purpose Technologies and Energy Policy

van Zon, Adriaan and Kronenberg, Tobias (2005). General Purpose Technologies and Energy Policy. UNU-MERIT Research Memoranda. UNU-MERIT.

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    Author van Zon, Adriaan
    Kronenberg, Tobias
    Title General Purpose Technologies and Energy Policy
    Series Title UNU-MERIT Research Memoranda
    Volume/Issue No. 12
    Publication Date 2005
    Place of Publication Maastricht, NL
    Publisher UNU-MERIT
    Pages 34
    Language eng
    Abstract We employ a general purpose technology model with endogenous stochastic growth to simulate the effects of different energy policy schemes. An R&D sector produces endogenous growth by developing radical and incremental technologies. These innovations result in blueprints for capital intermediates, which require raw capital and either carbon or non-carbon-based fuels. A carbon tax therefore affects not only the final production sector but also the R&D sector by making the development of non-carbon-based technologies more attractive. Due to path dependencies and possible lock-in situations, policy can have a significant long-term impact on the energy structure of the economy. Allowing for different elasticities of substitution between consumption and environmental quality, we examine the effects of different carbon policies on growth, environmental quality, and welfare. We find that an anti-carbon policy may reduce welfare initially, but in the long run there is a strong potential for a 'double dividend' due to faster growth and reduced pollution.
    Keyword General purpose technology
    Carbon tax
    Carbon fuel consumption
    Copyright Holder n/a
    Copyright Year 2005
    Copyright type All rights reserved
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    Created: Fri, 13 Dec 2013, 12:39:25 JST