ENTICE-BR: The Effects of Backstop Technology R&D on Climate Policy Models

David Popp

No 10285, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Recent attempts to endogenize technology in climate policy models have produced mixed results. Models including alternative technologies find large gains from induced technological change. However, technological progress in these models comes through learning-by-doing, which ignores the potential opportunity costs of technological change. Models using R&D spending as the driver of technological change address this. However, these models typically include only a single representative energy technology, substitution across technologies is not possible. This paper addresses these shortcomings by including policy-induced energy R&D in a model with a backstop energy technology. I show that, while induced technological change is important, larger welfare gains come from simply adding an alternative technology to the model. As in models with a single technology, opportunity costs of research limit the role induced innovation can play. Moreover, since the backstop technology improves welfare even without climate policy, accurate policy analysis depends on a carefully constructed baseline simulation.

JEL-codes: O33 O41 (search for similar items in EconPapers)
Date: 2004-02
Note: PR EEE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published as Popp, David. "ENTICE-BR: The Effects Of Backstop Technology R&D On Climate Policy Models," Energy Economics, 2006, v28(2,Mar), 188-202.

Downloads: (external link)
http://www.nber.org/papers/w10285.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:10285

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w10285

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().