Name:
innovation_led_transitions.pdf
Size:
939.6Kb
Format:
PDF
Description:
Final Published Version
Author
Lemoine, D.Affiliation
Department of Economics, University of ArizonaIssue Date
2024-01
Metadata
Show full item recordPublisher
American Economic AssociationCitation
Lemoine, Derek. 2024. "Innovation-Led Transitions in Energy Supply." American Economic Journal: Macroeconomics, 16 (1): 29-65.Collection Information
This item from the UA Faculty Publications collection is made available by the University of Arizona with support from the University of Arizona Libraries. If you have questions, please contact us at repository@u.library.arizona.edu.Abstract
Generalizing models of directed technical change, I show that com-plementarities between innovations and factors of production (here, energy resources) can drive transitions away from a dominant sector. In a calibrated numerical implementation, the economy gradually tran-sitions energy supply from coal to gas and then to renewable energy, even in the absence of policy. The welfare-maximizing tax on carbon emissions is J-shaped, immediately redirects most research to renew-ables, and rapidly transitions energy supply directly to renewables. The emission tax is twice as valuable as either the welfare-maximizing research subsidy or the welfare-maximizing mandate to use renewable resources. © (2024), (American Economic Association). All Rights Reserved.Note
Immediate accessISSN
1945-7707Version
Final Published Versionae974a485f413a2113503eed53cd6c53
10.1257/mac.20200369