In this note we study the distortions in an endogenous growth model developed by Grimaud and Tournemaine (2007), where new pieces of knowledge are produced in a R&D sector and used to reduce pollution emissions. Using this model along with a realistic calibration, we conclude that the economy...

We analyse a model of overlapping generations in which clean air, a pure public good is used as a private input into production. Although production exhibits constant returns to scale, endogenous growth can occur. In a laissez-faire equilibrium, firms generate rents that are the value of the...

This paper uses a dynamic general equilibrium model with overlapping generations in order to analyse and to compare emissions taxes and tradeable emissions permits. Even in the context of a perfect environment, i.e. with perfect information, perfect competition..., it is shown that privately...