Technological Change and Carbon Markets*

Carbon markets and technological innovation

This paper examines the effects of firm-level innovation in carbon-abatement technologies on optimal cap-and-trade schemes with and without price controls. We characterize optimal cap-and-trade regulation with price cap and price floor, and compare it to the special cases of pure taxation and simple emissions cap. Innovation shifts the tradeoff between priceand quantity-based instruments toward...

Induced technological change under carbon taxes

We study changes in fossil fuel and non-fossil energy use and carbon dioxide emissions induced by carbon taxes. We develop a partial energy equilibrium model with capital and labor as production factors, and endogenous technological change through learning by doing and learning through research, distinguishing between private and public innovations. Our model reproduces the learning curves typi...

Expectations, Technological Change, Information and the Theory of Financial Markets

This paper concerns itself with understanding the operation of financial markets using realistic assumptions. The expectations of economic agents generate prices in the marketplace. The generation of the expectations derives from the information available in the marketplace and the perceived economic needs of the agents. The revision of expectations occurs as new information is constantly enter...

Technological Change and Technological Strategy

Uncertainty and Technological Change

I would like to begin with two generally accepted propositions: First, technological change is a major ingredient of long-term economic growth, and second, technological change is characterized by a high degree of uncertainty. Understanding the nature of these uncertainties and the obstacles to surmounting them is not a trivial matter. Rather, it goes to the heart of how new technologies are de...