Citation

Discussion Paper Details

Please find the details for DP9921 in an easy to copy and paste format below:

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Title: Abandoning Fossil Fuel: How Fast And How Much?

Author(s): Armon Rezai and Frederick van der Ploeg

Publication Date: March 2014

Keyword(s): additive damages, carbon tax, climate change, directed technical change, integrated assessment, learning by doing, multiplicative damages, Ramsey growth and renewables subsidy

Programme Area(s): International Macroeconomics and Public Economics

Abstract: Climate change must deal with two market failures, global warming and learning by doing in renewable use. The social optimum requires an aggressive renewables subsidy in the near term and a gradually rising carbon tax which falls in long run. As a result, more renewables are used relative to fossil fuel, there is an intermediate phase of simultaneous use, the carbonfree era is brought forward, more fossil fuel is locked up and global warming is lower. The optimal carbon tax is not a fixed proportion of world GDP. The climate externality is more severe than the learning by doing one.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=9921

Bibliographic Reference

Rezai, A and van der Ploeg, F. 2014. 'Abandoning Fossil Fuel: How Fast And How Much?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=9921