Energy R&D Investments and Emissions Abatement Policy

Di Yin and Youngho Chang
Authors registered in the RePEc Author Service: Youngho Chang (yhchang@suss.edu.sg)

The Energy Journal, 2020, vol. Volume 41, issue Number 6, 133-156

Abstract: The study examines the interactions of the energy R&D investments and the CO2 abatement policy using an endogenous energy R&D climate-economy model. Energy R&D investments affect the carbon emissions directly through efficiency improvements and indirectly by changing the comparative advantages of resources. This study considers the R&D investments in energy efficiency and low-carbon technology and explores how energy R&D investments accelerate the energy transition from fossil fuels to low-carbon technology. Three policies of carbon abatements are considered, namely, the optimal policy, the 2 C policy, and the 1.5 C policy. From the perspectives of benefits and costs, the optimal policy leads to the least abatement costs compared to the other two abatement policies. This study indicates that the more restrictive the abatement policy is, the more severe economic damage is caused in the short run, but more economic welfare is gained in the long run.

Keywords: Energy R&D investments; Emissions abatement policy; Energy efficiency; Backstop technology; Energy substitution; Cost-benefit analysis; Climate change (search for similar items in EconPapers)
JEL-codes: F0 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (3)

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