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Time Profile of Climate Change Stabilization Policy

Author

Listed:
  • Reyer Gerlagh

    (Institute for Environmental Studies, Faculty of Earth and Life Sciences, Vrije Universiteit)

  • Marjan W. Hofkes

    (Institute for Environmental Studies, Faculty of Earth and Life Sciences, Vrije Universiteit)

Abstract

We develop an economic model for fossil-fuel and carbon-free energy supply and demand with capital and labor as production factors, and endogenous technological change through learning by research and learning by doing. We use the model to study inter-temporally efficient carbon taxes for climate stabilization targets. Calculations show an inverted U-curve with an initial rise of carbon-taxes that sets in motion the transition from fossil-fuels to carbon-free energy sources, followed by a drop in carbon taxes when the carbon-free energy sources have grown mature.

Suggested Citation

  • Reyer Gerlagh & Marjan W. Hofkes, 2004. "Time Profile of Climate Change Stabilization Policy," Working Papers 2004.139, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2004.139
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    More about this item

    Keywords

    Induced technological change; Environmental taxes; Partial equilibrium; Learning by doing;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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