Transition to Clean Technology
Author(s)Acemoglu, Daron; Akcigit, Ufuk; Hanley, Douglas; Kerr, William
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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.
DepartmentMassachusetts Institute of Technology. Department of Economics
Journal of Political Economy
University of Chicago Press
Acemoglu, Daron, Ufuk Akcigit, Douglas Hanley, and William Kerr. “Transition to Clean Technology.” Journal of Political Economy 124, no. 1 (February 2016): 52–104.
Author's final manuscript