Resource title

Technological change and the long-run cost of reducing CO2 emissions

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This paper reviews several studies of the costs of reducing the CO2 emissions. It focuses on how technological development has been dealt with in the models. Generally, the price and performance of alternative technologies have been assumed to be exogenous, whereas they will depend significantly on the extent to which these technologies are employed. However, some studies do model technological change endogenously, eg. by expressing costs as a declining function of accumulated investments in the technology. Four such studies are reviewed. The main policy implication is that policy makers need to create markets for these technologies in order to avoid "lock-out" of potentially superior technologies and to enable learning-bu-doing, which will bring costs down.

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en

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application/pdf

Resource resource URL

http://flora.insead.edu/fichiersti_wp/inseadwp1996/96-84.pdf

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Copyright INSEAD. All rights reserved