A Comment on the Environment and Directed Technical Change

Mads Greaker and Tom-Reiel Heggedal

Discussion Papers from Statistics Norway, Research Department

Abstract: The major claim in Acemoglu, Aghion, Bursztyn & Hemous (2012) (AABH) is that subsidies for research and development of clean technologies are more important than carbon taxes when dealing with climate change. However, they - unconventionally - assume that a patent only lasts for one period. In this note we introduce long-lived patents into the AABH model. This makes the role of a research subsidy for clean technologies in AABH far less crucial and reestablishes the role of the carbon tax. This is good news as it is far easier to tax emissions than to pick the right technologies to subsidize.

Keywords: Environment; directed technological change; innovation policy (search for similar items in EconPapers)
JEL-codes: O30 O31 O33 (search for similar items in EconPapers)
Date: 2012-11
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env, nep-ino, nep-ipr, nep-pr~ and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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