Gross world product and consumption in a global warming model with endogenous technological change

R. Gerlagh, B.C.C. van der Zwaan

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

This paper analyzes the macro-economic costs and effects on consumption and energy demand of limiting the global average atmospheric temperature increase to 2 °C. We use a macro-economic model in which there are two competing energy technologies (carbon and non-carbon, respectively), technological change is represented endogenously, and energy is aggregated through a CES function implying positive demand for the relatively expensive non-carbon technology. Technological change is represented through a learning curve describing decreasing energy production costs as a function of cumulative experience. We find that energy savings constitutes an important mechanism for decreasing abatement costs in the short- and medium-term, while the acquisition of additional learning experience substantially decreases abatement costs in the longer-term. © 2002 Elsevier Science B.V. All rights reserved.
Original languageEnglish
Pages (from-to)35-57
Number of pages23
JournalResource and Energy Economics
Volume25
DOIs
Publication statusPublished - 2003

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