Climate Change and Technical Progress: Impact of Informational Constraints

36 Pages Posted: 31 Jan 2013

See all articles by Anton A. Bondarev

Anton A. Bondarev

WWZ Universität Basel

Christiane Clemens

University of Bielefeld

Alfred Greiner

Bielefeld University - Department of Business Administration and Economics

Date Written: January 28, 2013

Abstract

In this paper we analyse a growth model that includes environmental and economic variables as well as technological progress under different informational constraints on the behavior of economic agents. To simulate the informationally constrained economy, we make use of the non-linear model predictive control technique. We compare models with exogenous and endogenous technical change as well as directed and undirected endogenous technical change under different informational structures. We show that endogenous technical change yields lower environmental damages than exogenous technical change with fully informed agents. At the same time, welfare may rise or decline depending on the efficiency of the technology in use. In the case of directed technical change, a green growth scenario generates a smaller temperature increase that, however, goes along with less output and lower welfare. This holds both for informationally constrained and unconstrained behaviour of agents. We find that the effects of informational constraints, with respect to the climate system, increase with the degree of endogeneity of technology in the model.

Keywords: KeEnvironmental economics, endogenous growth, directed technical change, model predictive control

JEL Classification: Environmental Economics, Economic Growth, Technical Progress

Suggested Citation

Bondarev, Anton A. and Clemens, Christiane and Greiner, Alfred, Climate Change and Technical Progress: Impact of Informational Constraints (January 28, 2013). Bielefeld Working Papers in Economics and Management No. 01-2013, Available at SSRN: https://ssrn.com/abstract=2207947 or http://dx.doi.org/10.2139/ssrn.2207947

Anton A. Bondarev (Contact Author)

WWZ Universität Basel ( email )

Basel, 4051
Switzerland

Christiane Clemens

University of Bielefeld ( email )

Universitätsstraße 25
Bielefeld, NRW 33613
Germany

Alfred Greiner

Bielefeld University - Department of Business Administration and Economics ( email )

P.O. Box 100131
Bielefeld, 33501
Germany
+49 521 106 4859 (Phone)
+49 521 106 67120 (Fax)

HOME PAGE: http://phoenix.wiwi.uni-bielefeld.de/lehrbereiche/vwl/wipol

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