TY - JOUR
T1 - The unilateral implementation of a sustainable growth path with directed technical change
AU - van den Bijgaart, Inge
N1 - Funding Information:
I would like to thank to Sjak Smulders and Reyer Gerlagh for helpful discussions and comments. This paper has benefited from the comments of two anonymous referees and the editors. I also thank Mauricio Rodriguez, Peter Kruse-Andersen, Gilbert Kollenbach, Giulia Valacchi, Cees Withagen, and participants at the CREE workshop in Oslo, Tilburg University TSC seminar, WCERE in Istanbul, EEA congress in Mannheim, CIRANO workshop in Montr?al, TI-VU ERC conference in Amsterdam and CESifo Area Conference on Energy and Climate Economics. I thank the Norwegian Research Council Grant no.?209698 for financial support. While carrying out this research, the author was affiliated with CREE|Oslo Center for Research on Environmentally friendly Energy.
Publisher Copyright:
© 2016 Elsevier B.V.
PY - 2017/1/1
Y1 - 2017/1/1
N2 - We determine the conditions under which unilateral policies can implement global sustainable growth in a dynamic two-country directed technical change framework. Domestic climate policies alter the structure of domestic and foreign production and thereby innovation incentives across countries. Implementing sustainable growth requires redirecting global innovation to the nonpolluting sector. If most innovation takes place in the foreign country, policies must redirect foreign innovation by relocating clean production to the foreign country. A calibration exercise suggests that the US or EU alone are too small to implement sustainable growth. A coalition of Annex I countries that ratified the Kyoto protocol can implement sustainable growth, yet required tax rates are very high.
AB - We determine the conditions under which unilateral policies can implement global sustainable growth in a dynamic two-country directed technical change framework. Domestic climate policies alter the structure of domestic and foreign production and thereby innovation incentives across countries. Implementing sustainable growth requires redirecting global innovation to the nonpolluting sector. If most innovation takes place in the foreign country, policies must redirect foreign innovation by relocating clean production to the foreign country. A calibration exercise suggests that the US or EU alone are too small to implement sustainable growth. A coalition of Annex I countries that ratified the Kyoto protocol can implement sustainable growth, yet required tax rates are very high.
KW - Directed technical change
KW - Trade
KW - Unilateral environmental policy
UR - http://www.scopus.com/inward/record.url?scp=85006412274&partnerID=8YFLogxK
U2 - 10.1016/j.euroecorev.2016.10.005
DO - 10.1016/j.euroecorev.2016.10.005
M3 - Article
AN - SCOPUS:85006412274
SN - 0014-2921
VL - 91
SP - 305
EP - 327
JO - European Economic Review
JF - European Economic Review
ER -