Climate Change Mitigation Options and Directed Technical Change: A Decentralized Equilibrium Analysis

André Grimaud, Gilles Lafforgue and Bertrand Magné

No 2875, CESifo Working Paper Series from CESifo

Abstract: The paper considers a climate change growth model with three R&D sectors dedicated to energy, backstop and CCS (Carbon Capture and Storage) efficiency. First, we characterize the set of decentralized equilibria: A particular equilibrium is associated to each vector of public tools which includes a carbon tax and a subsidy to each R&D sector. Moreover, we show that it is possible to compute any equilibrium as the solution of a maximization program. Second, we solve the first-best optimum problem and we implement it by computing the vector of optimal tools. Finally, we illustrate the theoretical model using some calibrated functional specifications. In particular, we investigate the effects of various combinations of public policies (including the optimal ones) by determining the deviation of each corresponding equilibrium from the "laisser-faire" benchmark.

Keywords: climate change; energy; CCS; directed technical change; carbon tax; R&D subsidies (search for similar items in EconPapers)
JEL-codes: H23 O32 Q43 Q54 Q55 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Climate change mitigation options and directed technical change: A decentralized equilibrium analysis (2011)
Working Paper: Climate Change Mitigation Options and Directed Technical Change: A Decentralized Equilibrium Analysis (2009)
Working Paper: Climate change mitigation options and directed technical change: A decentralized equilibrium analysis (2009)
Working Paper: Climate Change Mitigation Options and Directed Technical Change: A Decentralized Equilibrium Analysis (2009)
Working Paper: Climate change mitigation options and directed technical change: A decentralized equilibrium analysis (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2875

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