Modeling endogenous technological change for climate policy analysis
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The approach used to model technological change in a climate policy model is a critical determinant of its results in terms of the time path of CO2 prices and costs required to achieve various emission reduction goals. We provide an overview of the different approaches used in the literature, with an emphasis on recent developments regarding endogenous technological change, research and development, and learning. Detailed examination sheds light on the salient features of each approach, including strengths, limitations, and policy implications. Key issues include proper accounting for the opportunity costs of climate-related knowledge generation, treatment of knowledge spillovers and appropriability, and the empirical basis for parameterizing technological relationships. No single approach appears to dominate on all these dimensions, and different approaches may be preferred depending on the purpose of the analysis, be it positive or normative. © 2008 Elsevier B.V. All rights reserved.
Published Version (Please cite this version)10.1016/j.eneco.2008.03.001
Publication InfoGillingham, K; Newell, Richard G; & Pizer, William Aaron (2008). Modeling endogenous technological change for climate policy analysis. Energy Economics, 30(6). pp. 2734-2753. 10.1016/j.eneco.2008.03.001. Retrieved from https://hdl.handle.net/10161/6628.
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Dr. Richard G. Newell is the President and CEO of Resources for the Future (RFF), an independent, nonprofit research institution that improves environmental, energy, and natural resource decisions through impartial economic research and policy engagement. From 2009 to 2011, he served as the administrator of the US Energy Information Administration, the agency responsible for official US government energy statistics and analysis. Dr. Newell is an adjunct professor at Duke University, where he
Professor in the Sanford School of Public Policy
Billy Pizer joined the faculty of the Sanford School of Public Policy at Duke University in the fall of 2011. He also was appointed a faculty fellow in the Nicholas Institute for Environmental Policy Solutions, a nonpartisan institute at Duke that focuses on finding solutions to some of the nation's most pressing environmental challenges. His current research examines how we value the future benefits of climate change mitigation, how environmental regulation and climate policy can af
Alphabetical list of authors with Scholars@Duke profiles.