The Optimal Climate Policy Portfolio When Knowledge Spills Across Sectors

35 Pages Posted: 1 Sep 2010 Last revised: 5 Oct 2010

See all articles by Emanuele Massetti

Emanuele Massetti

Georgia Institute of Technology; CESifo (Center for Economic Studies and Ifo Institute); CMCC - Euro Mediterranean Centre for Climate Change

Lea Nicita

Fondazione Eni Enrico Mattei (FEEM)

Multiple version iconThere are 2 versions of this paper

Date Written: March 1, 2010

Abstract

This paper studies the implications for climate policy of the interactions between environmental and knowledge externalities. Using a numerical analysis performed with the hybrid integrated assessment model WITCH, extended to include mutual spillovers between the energy and the non-energy sector, we show that the combination between environmental and knowledge externalities provides a strong rationale for implementing a portfolio of policies for both emissions reduction and the internalisation of knowledge externalities. Moreover, we show that implementing technology policy as a substitute for stabilisation policy is likely to increase global emissions.

Keywords: Technical Change, Climate Change, Development, Innovation, Spillovers

JEL Classification: C72, H23, Q25, Q28, O31, O41, Q54

Suggested Citation

Massetti, Emanuele and Nicita, Lea, The Optimal Climate Policy Portfolio When Knowledge Spills Across Sectors (March 1, 2010). FEEM Working Paper No. 96.2010; CMCC Research Paper No. 101. Available at SSRN: https://ssrn.com/abstract=1669161 or http://dx.doi.org/10.2139/ssrn.1669161

Emanuele Massetti

Georgia Institute of Technology ( email )

685 Cherry St.
Atlanta, GA 30332-0345
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

CMCC - Euro Mediterranean Centre for Climate Change

via Augusto Imperatore, 16
Lecce, I-73100
Italy

Lea Nicita (Contact Author)

Fondazione Eni Enrico Mattei (FEEM) ( email )

C.so Magenta 63
Milano, 20123
Italy

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