Innovation-Led Transitions in Energy Supply

Lemoine, Derek

Innovation-Led Transitions in Energy Supply

No 23420, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Generalizing models of directed technical change, I show that complementarities between innovations and factors of production (here energy resources) can drive transitions away from a dominant sector. In a calibrated numerical implementation, the economy gradually transitions energy supply from coal to gas and then to renewable energy even in the absence of policy. The welfare-maximizing tax on carbon emissions is J-shaped, immediately redirects most research to renewables, and rapidly transitions energy supply directly to renewables. The emission tax is twice as valuable as either the welfare-maximizing research subsidy or the welfare-maximizing mandate to use renewable resources.

JEL-codes: N70 O33 O38 O44 Q43 Q54 Q55 Q58 (search for similar items in EconPapers)
Date: 2017-05
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env, nep-his, nep-ino and nep-reg
Note: EEE
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Citations: View citations in EconPapers (11)

Published as Derek Lemoine, 2024. "Innovation-Led Transitions in Energy Supply," American Economic Journal: Macroeconomics, vol 16(1), pages 29-65.

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Journal Article: Innovation-Led Transitions in Energy Supply (2024)
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