Jump to Main Content
General Equilibrium Effects of Green Technological Progress
- Van Long, Ngo, Stähler, Frank
- Environmental and resource economics 2018 v.69 no.1 pp. 159-166
- fossil fuels, models, renewable energy sources
- This paper demonstrates that technological progress in production of renewable energy can influence the extraction path of fossil fuels indirectly by a change in the equilibrium interest rate. We show in a simple model that the indirect effect can be so strong that first-period or even aggregate extraction levels rise with green technological progress, contrary to popular expectations.