An integrated assessment model with endogenous growth

Michael Hübler, Lavinia Baumstark, Marian Leimbach, Ottmar Edenhofer and Nico Bauer

No 12-054, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: We introduce endogenous directed technical change into numerical integrated climate and development policy assessment. We distinguish expenditures on innovation (R&D) and imitation (international technology spillovers) and consider the role of capital investment in creating and implementing new technologies. Our main contribution is to calibrate and numerically solve the model and to examine the model's sensitivity. As an application, we assess a carbon budget-based climate policy and vary the beginning of energy-saving technology transfer. Accordingly, China is a main beneficiary of early technology transfer. Herein, our results highlight the importance of timely international technology transfer for efficiently meeting global emission targets. Most of the consumption gains from endogenous growth are captured in the baseline. Moreover, mitigation costs turn out to be insensitive to changes in most of the parameters of endogenous growth. A higher effectivity of energy-specific relative to labor-specific expenditures on innovation and imitation reduces mitigation costs, though.

Keywords: endogenous growth; directed technical change; technology transfer; integrated assessment; carbon budget; China (search for similar items in EconPapers)
JEL-codes: O11 O30 O44 O47 Q32 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-dge, nep-ene, nep-env, nep-fdg and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

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