The Transition to Endogenous Technical Change in Climate-Economy Models: A Technical Overview to the Innovation Modeling Comparison Project

Jonathan Kohler, Michael Grubb, David Popp and Ottmar Edenhofer
Authors registered in the RePEc Author Service: Ottmar Edenhofer and Michael J. Grubb

The Energy Journal, 2006, vol. Endogenous Technological Change, issue Special Issue #1, 17-56

Abstract: This paper assesses endogenous technical change (ETC) in climate-economy models, using the models in the Innovation Modeling Comparison Project (IMCP) as a representative cross-section. ETC is now a feature of most leading models. Following the new endogenous growth literature and the application of learning curves to the energy sector, there are two main concepts employed: knowledge capital and learning curves. The common insight is that technical change is driven by the development of knowledge capital and its characteristics of being partly non-rival and partly non-excludable. There are various different implementations of ETC. Recursive CGE models face particular difficulties in incorporating ETC and increasing returns. The main limitations of current models are: the lack of uncertainty analysis; the limited representation of the diffusion of technology; and the homogeneous nature of agents in the models including the lack of representation of institutional structures in the innovation process.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (64)

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