Abstract:
In order to stabilize the climate, environmentally friendly energy sources must be developed and improved. The theory of technological change and endogenous growth are crucial when it comes to dealing with the climate issue. If the improvements in technology can be directed to the clean energy sources, it might be possible to solve the climate problem without sacrificing a considerable amount of long-run growth.
This thesis builds on the model by Acemoglu et al (2012), which is an endogenous growth model with directed technical change. It is a two-sector model with clean and dirty technologies that are improved by R&D. The model involves a social planner that can use a carbon tax and/or a research subsidy in order to conduct the optimal policy. I have extended the model into a two regions framework, where only one of the regions has environmental concerns. I have investigated by the use of numerical analysis if it is possible to redirect R&D in a multi-region world.
This thesis concludes that it is possible to redirect R&D by using a subsidy if the environmental concerned region can target more than 50% of the scientists. It will also be possible by using only a carbon tax if the technology gap between the two sectors is not too large. These results suggest that if the majority of the world can agree upon a climate agreement, it will be sufficient to redirect the technological change towards the environmentally friendly energy sources, which again can solve the climate issue.
Sammendrag:
Klimaendringene er en av de største utfordringene verden står overfor i dag. Dersom vi skal redusere utslippene uten å redusere den økonomiske veksten, må vi ha en teknologiutvikling som gjør det mulig å skifte fra fossile til miljøvennlige energikilder. I denne masteroppgaven har jeg undersøkt om det er mulig å snu forskningen mot de rene energikildene i en verden med to regioner.
Denne masteroppgaven utvider modellen til Acemoglu et al (2012) og undersøker om deres resultater endres dersom det innføres to regioner, hvor bare den ene har en miljøpolitikk. Analysen viser at det er mulig å snu forskningen mot de miljøvennlige energikildene dersom man kan påvirke majoriteten av forskerne med et forskningssubsidie. Dersom det opprinnelige teknologigapet mellom de fossile og de rene energikildene ikke er for stort, vil det også være mulig å snu teknologiutviklingen ved å bruke en karbonskatt.