Green Paradox and Directed Technical Change: The Effect of Subsidies to Clean R&D

Julien Daubanes (), André Grimaud and Luc Rouge

No 4334, CESifo Working Paper Series from CESifo

Abstract: We borrow standard assumptions from the non-renewable-resource-taxation and from the directed-technical-change literatures, to take a full account of the incentives to perform R&D activities in a dirty-resource sector and in a clean-resource-substitute sector. We show that a gradual rise in the subsidies to clean R&D activities causes a less rapid resource extraction, because it enhances the long-run resource productivity. Our result contradicts the green-paradox conjecture that technical improvements in resource substitutes accelerate resource extraction. Sector-specific innovation activities are tantamount to competing economic projects; general equilibrium with several R&D sectors implies no-arbitrage conditions that give rise to not-so-intuitive results.

Keywords: non-renewable resources; directed technical change; green paradox; environmental policy; R&D subsidies (search for similar items in EconPapers)
JEL-codes: O32 O41 Q32 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp4334.pdf (application/pdf)

Related works:
Working Paper: Green Paradox and Directed Technical Change: The Effects of Subsidies to Clean R&D (2012)
Working Paper: Green Paradox and Directed Technical Change: The Effects of Subsidies to Clean R&D (2012)
Working Paper: Green Paradox and Directed Technical Change: The Effects of Subsidies to Clean R&D (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_4334

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().