Abatement Technology Adoption Under Uncertainty

Datos Bibliográficos

ID19035948
AutoresAude Pommeret (0000-0002-9160-2095, autor de correspondencia), Katheline Schubert
Año2009
Volumen13
Número4
Páginas493-522
Fecha de publicación2009-09-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaMacroeconomic Dynamics (JOURNAL)
Identificadores de la revistaISSN: 1365-1005 • E-ISSN: 1469-8056
EditorialCambridge University Press (CUP) (PUBLISHER)
DOI10.1017/s1365100509080201
OpenAlexW2030808594
IdiomaEN
Citas recibidas2
Referencias citadas17

New technology has been credited with solving environmental problems by mitigating the effects of pollutants. We construct a general equilibrium model in which abatement technology is a real option and pollution's (negative) amenity value alters both risk aversion and the intertemporal elasticity of substitution. We derive the tax scheme such that in a decentralized economy agents adopt the abatement technology at the time that is socially optimal. We show that the higher the greenness of preferences, the earlier the adoption and the higher the optimal tax rate. We also obtain that adoption is fostered by uncertainty if the effective intertemporal elasticity of substitution is large enough, but is not affected by uncertainty if this elasticity is low. Moreover, the optimal tax rate, which only exists if the effective intertemporal elasticity of substitution is high, is an increasing function of uncertainty

Amenity · Econometrics · Economics · Elasticity of substitution · Macroeconomics · Microeconomics · Monetary economics · Price elasticity of demand · Tax rate · Thermodynamics · Climate Change Policy and Economics · Economic and Environmental Valuation · Fiscal Policy and Economic Growth