 Optimal taxation of nonrenewable resources during clean energy transition: A general equilibrium approachN. Baris Vardar Mathematical Social Sciences, 2024, vol. 130, issue C, 10-23 Abstract: In this paper we study clean energy transition in a modified version of the Ramsey growth model by including nonrenewable and renewable resources as well as pollution externalities. The main difference from previous works is that we consider imperfect substitution between nonrenewable and renewable resources. We characterize the social optimum and show that the economy converges to a clean state in the long run. We then study the decentralized equilibrium and show that the economy converges to the same state even without regulation, but with higher environmental damage. Further, we investigate the properties of the taxation trajectory that drives the laissez-faire economy to follow the optimal path and show that it can be either increasing or decreasing over time. We identify different channels that influence the path of optimal taxation and show that it depends, among other things, on the level of capital, the cost of renewable energy and the degree of substitution between renewable and nonrenewable resources. Keywords: Energy transition; Nonrenewable resource; Renewable resource; Imperfect substitution; Optimal taxation; Simultaneous resource use (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:eee:matsoc:v:130:y:2024:i:c:p:10-23 DOI: 10.1016/j.mathsocsci.2024.05.002 Access Statistics for this article Mathematical Social Sciences is currently edited by J.-F. Laslier More articles in Mathematical Social Sciences from Elsevier |
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