Technological change in economic models of environmental policy: a survey

Arbeitspapier

This paper provides an overview of the treatment of technological change in economic models of environmental policy. Numerous economic modeling studies have confirmed the sensitivity of mid- and long-run climate change mitigation cost and benefit projections to assumptions about technology costs. In general, technical progress is considered to be a noneconomic, exogenous variable in global climate change modeling. However, there is overwhelming evidence that technological change is not an exogenous variable but to an important degree endogenous, induced by needs and pressures. Hence, some environmenteconomy models treat technological change as endogenous, responding to socio-economic variables. Three main elements in models of technological innovation are: (i) corporate investment in research and development, (ii) spillovers from R&D, and (iii) technology learning, especially learning-by-doing. The incorporation of induced technological change in different types of environmental-economic models tends to reduce the costs of environmental policy, accelerates abatement and may lead to positive spillover and negative leakage.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 01-62

Classification and Topics

• Classification: Wirtschaft ; Econometric Modeling: General ; Renewable Resources and Conservation: Water ; Innovation; Research and Development; Technological Change; Intellectual Property Rights: General ; Computable General Equilibrium Models
• Subject: exogenous technological change ; induced technological change ; environmenteconomy models ; Umweltökonomik ; Klimaschutz ; Technischer Fortschritt ; Endogener technischer Fortschritt ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Löschel, Andreas
• Event: Veröffentlichung
• (who): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (where): Mannheim
• (when): 2001

Further information

• Handle: http://hdl.handle.net/10419/24483
• Last update: 10.03.2025, 11:41 AM CET