RP0101 – The optimal climate policy portfolio when knowledge spills across sectors

Division ECIP - Economic analysis of Climate Impacts and Policy Division
8/2010

Authors

  • Emanuele MassettiFEEM - Fondazione Eni Enrico Mattei, CMCC - Euro-Mediterranean Center on Climate Change
  • Lea NicitaFEEM - Fondazione Eni Enrico Mattei
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This paper studies the implications for climate policy of the interactions between environmental and knowledge externalities. Using a numerical analysis performed with the hybrid integrated assessment model WITCH, extended to include mutual spillovers between the energy and the nonenergy sector, we show that the combination between environmental and knowledge externalities provides a strong rationale for implementing a portfolio of policies for both emissions reduction and the internalisation of knowledge externalities. Moreover, we show that implementing technology policy as a substitute for stabilisation policy is likely to increase global emissions.

 

  • issn: C72, H23, Q25, Q28, O31, O41, Q54.
  • Keywords: Climate Change, Development, Innovation, Spillovers., Technical Change

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