Chakravorty, Ujjayant; Leach, Andrew; Moreaux, Michel - In: Journal of Economic Dynamics and Control 36 (2012) 10, pp. 1448-1461
We study how environmental regulation in the form of a cap on aggregate emissions from a fossil fuel (e.g., coal) interacts with the arrival of a clean substitute (e.g., solar energy). The cost of the substitute is assumed to decrease with cumulative use because of learning-by-doing. We show...