Green Technology Adoption and the Business Cycle

Jean-Marc Bourgeon and Margot Hovsepian
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Margot Hovsepian: X-DEP-ECO - Département d'Économie de l'École Polytechnique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris

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Abstract: We analyze the adoption of green technology in a dynamic economy affected by random shocks where demand spillovers are the main driver of technological improvements. Firms' beliefs and consumers' anticipations drive the path of the economy. We derive the optimal policy of investment subsidy and the expected time and likelihood of reaching a targeted level of environmental quality under economic uncertainty. This allows us to estimate the value that should be given to the environment in order to avoid an environmental catastrophe as a function of the strength of spillover effects.

Keywords: sustainability; Growth; uncertainty (search for similar items in EconPapers)
Date: 2018-04-16
New Economics Papers: this item is included in nep-env, nep-ino and nep-res
Note: View the original document on HAL open archive server: https://hal.science/hal-01508534v2
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Related works:
Working Paper: Green Technology Adoption and the Business Cycle (2017)
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