Modeling Technological Change in Economic Models of Climate Change: A Survey

32 Pages Posted: 16 Feb 2013

See all articles by Andreas Löschel

Andreas Löschel

University of Muenster - Chair of Microeconomics, esp. Energy and Resource Economics

Michael Schymura

ZEW – Leibniz Centre for European Economic Research

Date Written: 2013

Abstract

The assessment of climate change mitigation policies through economic modeling depends crucially on assumptions under which technological change has been incorporated in the model. Earlier climate-energy-economics modeling attempts heavily relied on the assumption of exogenous technological change. In this case, technological change is a function solely of time. However, such an approach seems insufficient, especially given developments in other fields of economic research that have helped to explain in more detail the process of technological change. A lot of research has been done hence on endogenizing technological change in large-scale models. The purpose of this paper is to summarize these efforts. We describe different model types and their treatment of exogenous technological change (autonomous energy efficiency improvements and backstop technologies) and endogenous technological change (including price inducement, learning-by-doing, investments in R & D and directed technical change). We conclude with some open questions and suggestions for future research.

Keywords: Exogenous Technical Change, Endogenous Technological Change, Price Inducement, Learning-By-Doing, Directed Technical Change, Modeling

JEL Classification: C50, C68, O30, Q25

Suggested Citation

Löschel, Andreas and Schymura, Michael, Modeling Technological Change in Economic Models of Climate Change: A Survey (2013). ZEW - Centre for European Economic Research Discussion Paper No. 13-007, Available at SSRN: https://ssrn.com/abstract=2217490 or http://dx.doi.org/10.2139/ssrn.2217490

Andreas Löschel (Contact Author)

University of Muenster - Chair of Microeconomics, esp. Energy and Resource Economics ( email )

Universitätsstr. 14-16
48143 Munster
Germany

HOME PAGE: http://www.wiwi.uni-muenster.de/eroe

Michael Schymura

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
99
Abstract Views
681
rank
316,327
PlumX Metrics