Abandoning Fossil Fuel: How much and how fast?

Armon Rezai, Frederick van der Ploeg

Publikation: Wissenschaftliche FachzeitschriftOriginalbeitrag in FachzeitschriftBegutachtung

Abstract

Keeping climate change within limits requires that most of the available carbon-based energy sources need to be abandoned underground. We study how fast and how much this transition to carbon-free energy needs to occur within a welfare-maximizing Ramsey growth model of climate change. Our model also addresses the market failure in the development of clean energy which leads to an under-provision of renewable energy, delays the transition time to the carbon-free era and reduces the amount of dirty fuels locked up in situ. Optimal policy requires an aggressive renewables subsidy in the near term and a gradually rising carbon tax which falls in long run. We also study the transition timing and the performance of recently proposed policy rules for the carbon tax.
OriginalspracheEnglisch
Seiten (von - bis)16 - 44
FachzeitschriftThe Manchester School
Jahrgang85
DOIs
PublikationsstatusVeröffentlicht - 2017

Österreichische Systematik der Wissenschaftszweige (ÖFOS)

  • 502042 Umweltökonomie
  • 502027 Politische Ökonomie
  • 502046 Volkswirtschaftspolitik
  • 502047 Volkswirtschaftstheorie

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