Discussion Papers no. 713

A Comment on the Environment and Directed Technical Change

The major claim in Acemoglu, Aghion, Bursztyn & Hemous (2012) (AABH) is that subsidies for research and development of clean technologies are more important than carbon taxes when dealing with climate change. However, they – unconventionally – assume that a patent only lasts for one period. In this note we introduce long-lived patents into the AABH model. This makes the role of a research subsidy for clean technologies in AABH far less crucial and reestablishes the role of the carbon tax. This is good news as it is far easier to tax emissions than to pick the right technologies to subsidize.

Om publikasjonen

Tittel

A Comment on the Environment and Directed Technical Change

Ansvarlige

Mads Greaker, Tom-Reiel Heggedal

Serie og -nummer

Discussion Papers no. 713

Utgiver

Statistics Norway

Emne

Discussion Papers

ISSN

1892-753X

Antall sider

14

Målform

Engelsk

Om Discussion Papers

Discussion papers comprise research papers intended for international journals and books. A preprint of a Discussion Paper may be longer and more elaborate than a standard journal article as it may include intermediate calculations, background material etc.

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