Energy, the Environment, and Technological Change

Energy, the Environment, and Technological Change

74 Pages · 2011 · 376 KB · English

technological change, so that the results are interpreted as the net effect of all technological change in a given period. For example,

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Table of Contents 1. Introduction ......................................................................................................................... 1 2. Key concepts ....................................................................................................................... 2 2.1. Fundamentals of Environmental Economics ............................................................... 2 2.2. The Economics of Technological Change ................................................................... 3 2.3 Implications for Environmental and Technology Policy .............................................. 4 3. Microeconomics: Innovation .............................................................................................. 6 3.1 Induced Innovation ....................................................................................................... 7 3.1.1. Empirical evidence on induced innovation in pollution abatement and energy conservation ........................................................................................................................ 7 3.1.2. Innovation and the Choice of Policy Instrument .................................................... 10 3.1.3. What Can Technological Change Economists Contribute? .................................... 16 3.2. The Impacts of Technological Change ...................................................................... 17 3.2.1 Empirical Evidence .................................................................................................. 18 3.2.2. Estimates of Technological Impact Using Learning-by-Doing .............................. 19 3.2.3. Government R&D ................................................................................................... 21 3.2.4. What Can Technological Change Economists Contribute? .................................... 22 4. Microeconomics: Diffusion .............................................................................................. 23 4.1 Diffusion within Countries ......................................................................................... 23 4.1.1. Theoretical Analyses ............................................................................................... 24 4.1.2. Empirical Studies .................................................................................................... 26 4.1.2.1 Environmental Policy and Adoption ..................................................................... 26 4.1.2.2. Are there Adoption Market Failures? .................................................................. 30 4.1.3 What Can Technological Change Economists Contribute? ..................................... 33 4.2 Diffusion Across Countries......................................................................................... 33 4.2.1. What Can Technological Change Economists Contribute? .................................... 38 5. Technological Change in Aggregate Energy-Environment Models ................................. 39 5.1 Exogenous Technological Change .............................................................................. 40 5.2 Endogenous Technological Change ............................................................................ 40 5.2.1 Direct Price-Induced Technological Change ........................................................... 42 5.2.2 R&D-induced technological change ........................................................................ 42 5.2.2.1 Theoretical Models of R&D-Induced Technological Change .............................. 43 5.2.2.2 Numerical Models of R&D-Induced Technological Change ............................... 45 5.2.3 Learning-Induced Technological Change ................................................................ 47 5.3 What Can Technological Change Economists Contribute? ........................................ 48 6. Conclusions ....................................................................................................................... 49 References ............................................................................................................................. 52 1. Introduction Within the field of environmental economics, the role of technological change has received much attention (Jaffe, Newell, and Stavins 2003). The long term nature of many environmental problems, such as climate change, makes understanding the evolution of technology an important part of projecting future policy impacts. Environmental technologies include

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