Suchergebnisse

The European Union has implemented demand push and technology pull policies to foster innovation on the energy and resource efficiency of capital goods. The state of the art of general equilibrium modelling applied to environmental policy rarely treats product and process innovation separately and product quality is, in the best case, exogenous. We develop a dynamic multi-sector CGE model that distinguishes between R&D-based process innovation for all firms, endogenous product innovation in the capital good sector and adoption decisions with respect to the installation of new capital vintages in the rest of the economy. Our results support the previous literature in finding that aggregate innovation declines following an energy tax but whereas process innovation is reduced, product innovation actually rises. We find that demand pull policies are less effective than product-related R&D subsidies to reduce aggregate energy intensity.

This report analyses how anti-carbon leakage measures, i.e. Border Carbon Adjustments (BCA), would interact with domestic and foreign firms' R&D investment. The results of a multi- country multi-sector model with endogenous R&D investment are presented, calibrated with data of major world economies. The model also features endogenous market structure in order to embed the effect of changes in market concentration on innovation incentives. Our analysis shows that endogenous R&D investments have significant effects on carbon leakage rates and also increase the effectiveness of BCA schemes. It also shows that understanding the competition-innovation nexus is crucial for a better design of unilateral climate policies. ; ENTRACTE Project - EU FP7

This Occasional Paper reviews how climate change and policies to address it may affect the macro economy in ways that are relevant for central banks' monetary policy assessment of the inflation outlook. To this end, the paper focuses on the potential channels through which climate change and the policy and technological responses to climate change could have an impact on the real economy. Overall, the existing literature suggests a likelihood that climate change will have demand-side implications, but will also cause a negative supply shock in the decades to come and may even have the potential to lead to widespread disruption to the economic and financial system. We may already be observing a rise in the costs resulting from an increased incidence of extreme weather conditions. The direct effects stemming from climate change are likely to increase gradually over time as global temperatures increase. Nevertheless, it is extremely difficult to obtain reliable estimates of the overall macroeconomic impact of climate change, which will also depend on the extent to which it can be brought under control through mitigation policies requiring major structural changes to the economy. In order to implement such policies political economy obstacles will need to be overcome and measures will need to be put in place that address underlying market failures. They could involve significant fiscal implications, with an increased price of carbon contributing to higher overall prices. At the same time, these measures could also foster innovation, generate fiscal revenues and dampen inflationary pressures as energy efficiency increases and the price of renewable energy falls.

Cover -- Weather Shocks and Output in Low-Income Countries: The Role of Policies and Adaptation -- I. INTRODUCTION -- II. CLIMATE ADAPTATION POLICY: A TOOLKIT -- III. EMPIRICAL ANALYSIS -- IV. MODEL-BASED ANALYSIS -- V. CONCLUSION -- VI. REFERENCES -- VII. ANNEX -- Annex 1. Data Sources and Country Groupings -- Annex 2. Modeling Optimal Adaptation.