 Technology Shocks, Directed Technical Progress and Climate ChangeAndré Grimaud and Luc Rougé No 25-1633, TSE Working Papers from Toulouse School of Economics (TSE) Abstract: Technical progress is considered a key element in the ght against climate change. It may take the form of technological breakthroughs, that is, shocks that induce signicant leaps in the stock of knowledge. We use an endogenous growth framework with directed technical change to analyze the climate impact of such shocks. Two production subsectors coexist: one subsector is fossil-based, using a non-renewable resource, and yields carbon emissions; the other subsector uses a clean, renewable resource. At a given date, the economy benets from an exogenous technology shock. We fully characterize the general equilibrium and analyze how the shock modies the economys trajectory. The overall e¤ect on carbon emissions basically depends on the substitutability between the production subsectors, the initial state of the economy, and the nature and size of the shock. We notably show that green technology shocks induce higher short-term carbon emissions when the two subsectors are gross complements, but also in numerous cases when they are gross substitutes. Keywords: directed technical change; endogenous growth; technology shocks; climate; change (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:130495 Access Statistics for this paper More papers in TSE Working Papers from Toulouse School of Economics (TSE) Contact information at EDIRC. |
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