We develop a theoretical model of directed technical change in which clean (zero emissions) and dirty (emissions-intensive) technologies are embodied in long-lived capital. We show how obsolescence costs generated by technological embodiment create inertia in a transition to clean growth....

This paper provides a review of the literature on competitiveness and leakage concerns associated with differentiated climate abatement commitments among countries. The literature reviewed is not exhausted, but it is sufficient to provide a balanced view of both academics and policy circles....

Computable general equilibrium (CGE) models are widely used to analyse macroeconomic and sectoral effects of climate policies. Developing new and improving existing carbon-free energy technologies will be crucial to limit the long-term economic costs of mitigation policies. Such technologies are...

Policies aimed at reducing emissions from fossil fuels may increase climate damages. This “Green Paradox” emerges if resource owners increase near-term extraction in fear of stricter future policy measures. Hans-Werner Sinn (2008) showed that the paradox occurs when increasing resource taxes...

We use historical industrial emissions data to assess the level of abatement and overallocation that took place across European countries during the pilot phase (2005-2007)of the European Union Emission Trading Scheme. Using a dynamic panel data model, we estimate the counterfactual...

We study the effectiveness of climate change policy in a model with multiple non-renewable resources that differ in their carbon content. We find that, when allowing some time between announcement and implementation of a cap on carbon dioxide emissions, emissions from non-renewable energy...

This paper evaluates the consequences of renewable energy policies on welfare, resource rents and energy costs in a world where carbon pricing is imperfect and the regulator seeks to limit emissions to a (cumulative) target. We use a global general equilibrium model with an intertemporal fossil...

We propose a realistic approach to climate policy based on the Copenhagen Agreement to reduce Greenhouse Gases (GHGs) emissions. We assess by how much the non-binding, although official, commitments to reduce emissions made in Copenhagen will affect the level of world GHGs emissions in 2020. Our...

This paper aims at characterizing the conditions of wind power deployment in order to infer a carbon price level that would provide wind power with comparable advantage over fossil fuel technologies as effective wind support policies. The analysis is conducted on Danish data from 2000 to 2010,...

This paper presents the first empirical test of the green paradox hypothesis, according to which well-intended but imperfectly implemented policies may lead to detrimental environmental outcomes due to supply side responses. We use the introduction of the Acid Rain Program in the U.S. as a case...