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The Environment and Directed Technical Change AgEcon
Acemoglu, Daron; Aghion, Philippe; Bursztyn, Leonardo; Hemous, David.
This paper introduces endogenous and directed technical change in a growth model with environmental constraints. A unique final good is produced by combining inputs from two sectors. One of these sectors uses "dirty" machines and thus creates environmental degradation. Research can be directed to improving the technology of machines in either sector. We characterize dynamic tax policies that achieve sustainable growth or maximize intertemporal welfare. We show that: (i) in the case where the inputs are sufficiently substitutable, sustainable long-run growth can be achieved with temporary taxation of dirty innovation and production; (ii) optimal policy involves both “carbon taxes” and research subsidies, so that excessive use of carbon taxes is avoided;...
Tipo: Working or Discussion Paper Palavras-chave: Environment; Exhaustible Resources; Directed Technological Change; Innovation; Environmental Economics and Policy; O30; O31; O33; C65.
Ano: 2010 URL: http://purl.umn.edu/92839
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