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Acemoglu D, Aghion P, Bursztyn L, et al. The Environment and Directed Technical Change. Am Econ Rev. 2012;102(1):131-166doi: 10.1257/aer.102.1.131.
Acemoglu, D., Aghion, P., Bursztyn, L., & Hemous, D. (2012). The Environment and Directed Technical Change. The American economic review, 102(1), 131-166. https://doi.org/10.1257/aer.102.1.131
Acemoglu, Daron, et al. "The Environment and Directed Technical Change." The American economic review vol. 102,1 (2012): 131-166. doi: https://doi.org/10.1257/aer.102.1.131
Acemoglu D, Aghion P, Bursztyn L, Hemous D. The Environment and Directed Technical Change. Am Econ Rev. 2012 Feb;102(1):131-166. doi: 10.1257/aer.102.1.131. PMID: 26719595; PMCID: PMC4692283.
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Am Econ Rev. 2012 Feb;102(1):131-166. doi: 10.1257/aer.102.1.131.

The Environment and Directed Technical Change.

The American economic review

Daron Acemoglu, Philippe Aghion, Leonardo Bursztyn, David Hemous

Affiliations

  1. Massachusetts Institute of Technology, Department of Economics, 50 Memorial Drive, Cambridge MA 02142-1347 and Canadian Institute for Advanced Research.
  2. Harvard University, Department of Economics, Littauer Center, 1805 Cambridge Street, Cambridge, MA 02138; Stockholm University (IIES); and Canadian Institute for Advanced Research.
  3. University of California Los Angeles, Anderson School of Management, 110 Westwood Plaza, C-513 Los Angeles, CA 90095-1481.
  4. Harvard University, Department of Economics, Littauer Center, 1805 Cambridge Street, Cambridge, MA 02138.

PMID: 26719595 PMCID: PMC4692283 DOI: 10.1257/aer.102.1.131

Abstract

This paper introduces endogenous and directed technical change in a growth model with environmental constraints. The final good is produced from "dirty" and "clean" inputs. We show that: (i) when inputs are sufficiently substitutable, sustainable growth can be achieved with temporary taxes/subsidies that redirect innovation toward clean inputs; (ii) optimal policy involves both "carbon taxes" and research subsidies, avoiding excessive use of carbon taxes; (iii) delay in intervention is costly, as it later necessitates a longer transition phase with slow growth; and (iv) use of an exhaustible resource in dirty input production helps the switch to clean innovation under laissez-faire. (JEL O33, O44, Q30, Q54, Q56, Q58).

References

  1. Nature. 2004 Dec 2;432(7017):610-4 - PubMed
  2. Nature. 2005 Aug 4;436(7051):686-8 - PubMed
  3. Nature. 2005 Dec 22;438(7071):E11-2; discussion E13 - PubMed
  4. Am Econ Rev. 2012 Feb;102(1):131-166 - PubMed

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