Journal of Political Economy Vol. 124 No. 1 2016

Transition to Clean Technology

Daron Acemoglu; Ufuk Akcigit¹; Douglas Hanley²; William R. Kerr³

¹ California University of Pennsylvania · ² University of Pittsburgh · ³ Harvard University Press

Abstract

We develop an endogenous growth model in which clean and dirty technologies compete in production. Research can be directed to either technology. If dirty technologies are more advanced, the transition to clean technology can be difficult. Carbon taxes and research subsidies may encourage production and innovation in clean technologies, though the transition will typically be slow. We estimate the model using microdata from the US energy sector. We then characterize the optimal policy path that heavily relies on both subsidies and taxes. Finally, we evaluate various alternative policies. Relying only on carbon taxes or delaying intervention has significant welfare costs.

DOI

10.1086/684511

Volume

124

Issue

1

Pages

52-104

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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