Knowledge Diffusion, Endogenous Growth, and the Costs of Global Climate Policy

Lucas Bretschger, Filippo Lechthaler, Sebastian Rausch and Lin Zhang

No 15/226, CER-ETH Economics working paper series from CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich

Abstract: This paper examines the effects of knowledge diffusion on growth and costs of climate policy. We develop a general equilibrium model with endogenous growth which represents knowledge diffusion between sectors and regions. Knowledge diffusion depends on accessibility and absorptive capacity which we estimate econometrically using patent and citation data. Knowledge diffusion leads to a “greening” of economies boosting productivity of “clean” carbon-extensive sectors. Knowledge diffusion lowers the costs of global climate policy by about 90% for emerging countries (China) and 20% for developed regions (Europe and USA), depending on the substitutability between different knowledge types.

Keywords: Technological Change: Choices and Consequences; Environment and Growth; Technological Innovation; Computable General Equilibrium Models (search for similar items in EconPapers)
JEL-codes: C68 O33 O44 Q55 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2015-12
New Economics Papers: this item is included in nep-ene, nep-env, nep-ino and nep-knm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Journal Article: Knowledge diffusion, endogenous growth, and the costs of global climate policy (2017)
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