Innovation policies versus abatement policies in a small, open economy with a climate restriction

Project managerSnorre Kverndokk
ClientNFR via SSB
Client project no.
Period2005 - 2005 (ended)

Project description

The challenge of climate change calls for large reductions of global CO2-emissions in the coming decades. This will require development and diffusion of alternative energy technologies. We ask: · How are development and diffusion of climatically benign energy technologies affected by the level, timing, and distribution of price-correcting tools designed to achieve Norway's emission targets (CO2-taxes/ marketable quotas)? · Is there a rational for other, direct, public stimuli of environmental innovations? · Should innovation policy be directed to domestic R&D-areas with potentials for defining the research frontier, exemplified by CO2-free gas-power technology, or rather to efforts that more generally stimulate to diffusion and absorption of internationally available knowledge? One approach will be to analyze the innovation processes within the energy sector by case studies and partial models. A second approach will be to place the energy sector within an economy-wide, dynamic, computable, general equilibrium (CGE) setting, which captures a wider range of the wedges between private and social returns to innovations in the environment/energy nexus. We will account for the opportunity costs of the R&D, the effects on the value of Norwegian natural resources and environment, spillover effects from R&D, and pro-competitive and tax interaction effects of policy options. This project is a cooperation with Statistics Norway (Brita Bye).


Other publications

Heggedal, T.-R. and S. KverndokkThe cost of greenhouse gas mitigation in Europe – Kyoto and beyond2007International Association for Energy Economics Newsletter, Fourth Quarter, 9-12[PDF]