A carbon tax versus clean subsidies: Optimal and suboptimal policies for the clean transition

Anthony Wiskich

Energy Economics, 2024, vol. 132, issue C

Abstract: A three-sector – services, clean and dirty - integrated assessment model with endogenous technology is described. Optimal policy leads to a period of intense clean research and requires a carbon tax and clean research subsidies. Using multiple calibrations, I explore the relative performance of these instruments when acting alone, along with a clean production subsidy and a dirty research tax. A carbon tax wins in most, but if optimal policy occurs after 2050, each instrument wins in some calibrations. Both a carbon tax and a clean production subsidy should apply if research instruments are unavailable. (JEL O30, O44, Q54, Q56, Q58).

Keywords: Climate change; Directed technical change; Climate policies; Carbon taxes; Clean subsidies (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:132:y:2024:i:c:s014098832400118x

DOI: 10.1016/j.eneco.2024.107410

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