The Environment and Directed Technical Change: Comment

17 Pages Posted: 26 Jan 2012

See all articles by Jean-Charles Hourcade

Jean-Charles Hourcade

CIRED, International Research Center on Environment & Development, France

Antonin Pottier

Centre International de Recherche sur l'Environnement et le Développement

Espagne Etienne

CIRED, International Research Center on Environment & Development, France

Date Written: January 24, 2012

Abstract

This paper discusses the growth model with environmental constraints recently presented in (Acemoglu et al., 2011) which focuses on the redirection of technical change by climate policies with research subsidies and a carbon tax. First, Acemoglu et al.'s model and chosen parameters yield numerical results that do not support the conclusion that ambitious climate policies can be conducted “without sacrificing (much or any) long-run growth”. Second, they select unrealistic key parameters for carbon sinks and elasticity of substitution. We find that more realistic parameters lead to very different results. Third, the model leads to an unrealistic conclusion when used to analyze endogenous growth, suggesting specification problems.

Keywords: Technological Change, Endogenous Growth, Climate, Energy Substitutability

JEL Classification: O30, O33, Q43, Q54, Q56

Suggested Citation

Hourcade, Jean-Charles and Pottier, Antonin and Etienne, Espagne, The Environment and Directed Technical Change: Comment (January 24, 2012). FEEM Working Paper No. 95.2011. Available at SSRN: https://ssrn.com/abstract=1991109 or http://dx.doi.org/10.2139/ssrn.1991109

Jean-Charles Hourcade (Contact Author)

CIRED, International Research Center on Environment & Development, France ( email )

Campus du Jardin Tropical
45 bis avenue de la Belle Gabrielle
F94736 Nogent sur Marne Cedex
France

Antonin Pottier

Centre International de Recherche sur l'Environnement et le Développement ( email )

45bis, avenue de la Belle Gabrielle
Nogent sur Marne CEDEX, 94736
France

Espagne Etienne

CIRED, International Research Center on Environment & Development, France ( email )

Campus du Jardin Tropical
45 bis avenue de la Belle Gabrielle
F94736 Nogent sur Marne Cedex
France

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