Article2014

GROWTH, RENEWABLES, AND THE OPTIMAL CARBON TAX

Frederick van der Ploeg · Cees A.A.M. Withagen

128 citations0/0 files storedInternational Economic Review

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Climate Change Policy and Economics Energy, Environment, Economic Growth Energy, Environment, and Transportation Policies

Abstract

Optimal climate policy is investigated in a Ramsey growth model of the global economy with exhaustible oil reserves, an infinitely elastic supply of renewables, stock‐dependent oil extraction costs, and convex climate damages. Four regimes can occur, depending on the initial social cost of oil being larger or smaller than that of renewables and depending on the initial oil stock being large or small. We also offer some policy simulations for the first and second regime, which illustrate that with a lower discount rate more oil is left in situ and renewables are phased in more quickly. We identify the conditions under which the optimal carbon tax rises or decreases. Subsidizing renewables (without a carbon tax) induces more oil to be left in situ and a quicker phasing in of renewables, but oil is depleted more rapidly initially. The net effect on global warming is ambiguous.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 128 citations exist upstream.

References

2007The Economics of Climate Change: The Stern Review 2007The Economics of Climate Change 1985The equity premium: A puzzle 2008Climate Change 2007: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change 1931The Economics of Exhaustible Resources 2012The environment and directed technical change 1989Consumption, Income, and Interest Rates: Reinterpreting the Time Series Evidence 1991Substitution, Risk Aversion, and the Temporal Behavior of Consumption and Asset Returns: An Empirical Analysis

Cited by

2020Climate change and green transitions in an agent-based integrated assessment model 2023Can green tax policy promote China's energy transformation?— A nonlinear analysis from production and consumption perspectives 2012Green Growth, Green Paradox and the global economic crisis 2016Intergenerational Inequality Aversion, Growth, and the Role of Damages: Occam’s Rule for the Global Carbon Tax 2019To build or not to build? Capital stocks and climate policy∗

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.