Innovation and Climate Policy

Modeling Induced Innovation in Climate Change Policy

Climate Policy and Innovation in the Absence of Commitment

It is well-recognized that new technology is a crucial part of any solution to the problem of climate change. But since investments in research and development take time to mature, price and quantity instruments, i.e., carbon taxes and cap-and-trade, run into a commitment problem. We assume that the government cannot commit to the level of a policy instrument in advance, but sets the level to b...

Climate Policy, Prudence, and the Role of Technological Innovation

We study the importance for climate policy of uncertainty concerning the gravity of climate change and thus the benefits of abatement. In particular, this uncertainty can have different effects on the benefits of early abatement and R&D. We explore these differences, which depend in large part on the curvature of the marginal abatement cost function—prudence, in other words. With convex margina...

Climate Policy and Innovation: A Quantitative Macroeconomic Analysis Online Appendix

Innovation surveys and innovation policy