Time Profile of Climate Change Stabilization Policy

40 Pages Posted: 13 Nov 2004

See all articles by Reyer Gerlagh

Reyer Gerlagh

Tilburg University - Tilburg University School of Economics and Management

Marjan W. Hofkes

Vrije Universiteit Amsterdam

Date Written: November 2004

Abstract

We develop an economic model for fossil-fuel and carbon-free energy supply and demand with capital and labor as production factors, and endogenous technological change through learning by research and learning by doing. We use the model to study inter-temporally efficient carbon taxes for climate stabilization targets. Calculations show an inverted U-curve with an initial rise of carbon-taxes that sets in motion the transition from fossil-fuels to carbon-free energy sources, followed by a drop in carbon taxes when the carbon-free energy sources have grown mature.

Keywords: Induced technological change, Environmental taxes, Partial equilibrium, Learning by doing

JEL Classification: H23, O31, O41, Q42, Q43

Suggested Citation

Gerlagh, Reyer and Hofkes, Marjan W., Time Profile of Climate Change Stabilization Policy (November 2004). FEEM Working Paper No. 139.04. Available at SSRN: https://ssrn.com/abstract=615669 or http://dx.doi.org/10.2139/ssrn.615669

Reyer Gerlagh (Contact Author)

Tilburg University - Tilburg University School of Economics and Management ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Marjan W. Hofkes

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
Amsterdam, 1081 HV
Netherlands

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