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- Title
The Transition to Endogenous Technical Change in Climate-Economy Models: A Technical Overview to the Innovation Modeling Comparison Project.
- Authors
Köhler, Jonathan; Grubb, Michael; Popp, David; Edenhofer, Ottmar
- Abstract
This paper assesses endogenous technical change (ETC) in climate-economy models, using the models in the Innovation Modeling Comparison Project (IMCP) as a representative cross-section. ETC is now a feature of most leading models. Following the new endogenous growth literature and the application of learning curves to the energy sector, there are two main concepts employed: knowledge capital and learning curves. The common insight is that technical change is driven by the development of knowledge capital and its characteristics of being partly non-rival and partly non-excludable. There are various different implementations of ETC. Recursive CGE models face particular difficulties in incorporating ETC and increasing returns. The main limitations of current models are: the lack of uncertainty analysis; the limited representation of the diffusion of technology; and the homogeneous nature of agents in the models including the lack of representation of institutional structures in the innovation process.
- Subjects
TECHNOLOGICAL innovations; ENERGY industries; CLIMATOLOGY; CLIMATE change; ENDOGENOUS growth (Economics)
- Publication
Energy Journal, 2006, Vol 27, p17
- ISSN
0195-6574
- Publication type
Article
- DOI
10.5547/issn0195-6574-ej-volsi2006-nosi1-2