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General Equilibrium Effects of Green Technological Progress

Author:
Van Long, Ngo, Stähler, Frank
Source:
Environmental and resource economics 2018 v.69 no.1 pp. 159-166
ISSN:
0924-6460
Subject:
fossil fuels, models, renewable energy sources
Abstract:
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.
Agid:
5888922