Learning by Doing vs Learning by Researching in a Model of Climate Change Policy Analysis

42 Pages Posted: 16 Apr 2003

See all articles by Marzio Galeotti

Marzio Galeotti

University of Milan - Department of Environmental Science and Policy (DESP); Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy

Efrem Castelnuovo

University of Melbourne - Department of Economics

Gretel Gambarelli

World Bank - Environment Department - Climate Change Unit

Sergio Vergalli

University of Brescia - Department of Economics; Fondazione Eni Enrico Mattei (FEEM), Milan

Date Written: January 2003

Abstract

Many predictions and conclusions in the climate change literature have been made and drawn on the basis of theoretical analyses and quantitative models that assume exogenous technological change. One is naturally led to wonder whether those conclusions and policy prescriptions hold in the more realistic case of endogenously evolving technologies. In previous work we took a popular integrated assessment model and modified it so as to allow for an explicit role of the stock of knowledge which accumulates through R&D investment. In our formulation knowledge affects both the output production technology and the emission-output ratio. In this paper we make further progress in our efforts aimed to model the process of technological change. In keeping with recent theories of endogenous growth, we specify two ways in which knowledge accumulates: via a deliberate, optimally selected R&D decision or via experience, giving rise to Learning by Doing. As an illustration, we simulate the model under the two versions of endogenous technical change and look at the dynamics of a selected number of relevant variables, including growth rates of GDP and physical capital, as well as total emissions and rate of domestic abatement.

Keywords: Climate Policy, Environmental Modeling, Integrated Assessment, Technical Change

JEL Classification: H0, H2, H3

Suggested Citation

Galeotti, Marzio and Castelnuovo, Efrem and Gambarelli, Gretel and Vergalli, Sergio, Learning by Doing vs Learning by Researching in a Model of Climate Change Policy Analysis (January 2003). FEEM Working Paper No. 11.2003. Available at SSRN: https://ssrn.com/abstract=389041 or http://dx.doi.org/10.2139/ssrn.389041

Marzio Galeotti (Contact Author)

University of Milan - Department of Environmental Science and Policy (DESP) ( email )

2 via Celoria
I-20133 Milano
Italy
+39-2-50316470 (Phone)
+39-2-50316486 (Fax)

HOME PAGE: http://www.unimi.it/chiedove/cv/ENG/marzio_galeotti.pdf?1531977155891

Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy ( email )

via Rontgen
Milan, 20123
Italy
+39-2-58362340 (Phone)

HOME PAGE: http://www.iefe.unibocconi.it

Efrem Castelnuovo

University of Melbourne - Department of Economics ( email )

Melbourne, 3010
Australia

HOME PAGE: http://https://sites.google.com/site/efremcastelnuovo/home

Gretel Gambarelli

World Bank - Environment Department - Climate Change Unit ( email )

1818 H Street NW
Room MC5-824, Mail Stop MC5-517
Washington, DC 20433
United States
+1 (202) 473 9396 (Phone)
+1 (202) 614 3240 (Fax)

Sergio Vergalli

University of Brescia - Department of Economics ( email )

Via San Faustino 74B
Brescia, 25122
Italy

Fondazione Eni Enrico Mattei (FEEM), Milan ( email )

Corso Magenta 63
20123 Milan
Italy

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