Endogenizing Technological Change: Matching Empirical Evidence to Modeling Needs

Given that technologies to significantly reduce fossil fuel emissions are currently unavailable or only available at high cost, technological change will be a key component of any long-term strategy to reduce greenhouse gas emissions. In light of this, the amount of research on the pace, direction, and benefits of environmentally-friendly technological change has grown dramatically in recent years. This research includes empirical work estimating the magnitude of these effects, and modeling exercises designed to simulate the importance of endogenous technological change in response to climate policy. Unfortunately, few attempts have been made to connect these two streams of research. This paper attempts to bridge that gap. We review both the empirical and modeling literature on technological change. Our focus includes the research and development process, learning by doing, the role of public versus private research, and technology diffusion. Our goal is to provide an agenda for how both empirical and modeling research in these areas can move forward in a complementary fashion. In doing so, we discuss both how models used for policy evaluation can better capture empirical phenomena, and how empirical research can better address the needs of models used for policy evaluation.

Endogenizing Technological Change: Matching Empirical Evidence to Modeling Needs

Technologies to reduce significantly fossil-fuel emissions currently are unavailable or only available at high cost. In light of this, the amount of research on the pace, direction, and benefits of environmentally friendly technological change has grown dramatically in recent years. This research includes empirical estimates of these effects and modeling exercises designed to simulate endogenous technological change in response to climate policy. Unfortunately, few attempts have been made to connect these two streams of research. This paper attempts to bridge that gap, reviewing both the empirical and modeling literature on technological change. Our goal is to provide an agenda for how both empirical and modeling research in these areas can move forward in a complementary fashion. In doing so, we discuss how models used for policy evaluation can better capture empirical phenomena and how empirical research can better address the needs of models used for policy evaluation.endogenous technological change, climate change, CGE modeling

Tourism Immiserization: Fact or Fiction?

Tourism plays a major part in the development strategies of both developing and developed countries because of the alleged potential of generating foreign exchange, economic growth and welfare enhancement (Sinclair and Stabler, 1997; Sinclair, 1988). Consequently, in several countries a considerable amount of resources is allocated to further promote the tourism sector in a hope of reaping more economic benefits. However, it is still debatable whether tourism is beneficial for the tourist-receiving country or not. While empirical studies (Adams and Parmenter, 1994; Zhou et al., 1996, Baaijens et al., 1998; Blake, 2000; Blake et. al., 2003; Dwyer et al., 2003), argue that tourism expansion is beneficial to the economy, theoretical studies (Copeland, 1991; Chen and Devereux, 1999; Hazari and Nowak, 2003; Hazari et al., 2003; Nowak et al., 2003) posit that tourism expansion can be immiserizing. This paper critically reviews the theoretical and empirical literature to identify the sources via which tourism expansion can benefit or harm the economy. The issues are then empirically investigated using a CGE model for Mauritius to identify the conditions under which tourism expansion can be immiserizing.Tourism, Immiserization, Welfare, Economic growth

Induced Technological Change in a Limited Foresight Optimization Model

The threat of global warming calls for a major transformation of the energy system the coming century. Modeling technological change is an important factor in energy systems modeling. Technological change may be treated as induced by climate policy or as exogenous. We investigate the importance of induced technological change (ITC) in GET-LFL, an iterative optimization model with limited foresight that includes learning-by-doing. Scenarios for stabilization of atmospheric CO2 concentrations at 400, 450, 500 and 550 ppm are studied. We find that the introduction of ITC reduces the total net present value of the abatement cost over this century by 3-9% compared to a case where technological learning is exogenous. Technology specific polices which force the introduction of fuel cell cars and solar PV in combination with ITC reduce the costs further by 4-7% and lead to significantly different technological solutions in different sectors, primarily in the transport sector.Energy system model, Limited foresight, Climate policy, Endougenous learning, Technological lock-in

Experimental evidence

Um politische Ziele wie Wirtschaftswachstum, geringe Arbeitslosigkeit und langfristige internationale Wettbewerbsfähigkeit zu erreichen, wird die Förderung der nationalen Innovationstätigkeit als ein zentrales Element für erfolgreiche Wirtschaftspolitik angesehen. Diese Dissertation trägt zu der Diskussion über den Einfluss von regulativen und finanziellen Politikinstrumenten auf unternehmerische Entscheidungen bei, indem die Effekte von spezifischen Politikinstrumenten auf die individuelle Innovationstätigkeit und das Kooperationsverhalten analysiert werden. Es werden dabei die Effekte dreier Politikinstrumente – intellektuelle Eigentumsrechte, Innovationswettbewerbe und Subventionen – mit Hilfe von Laborexperimenten in einem neuen experimentellen Design untersucht, das im Kern eine Scrabble-ähnliche Wort-Suchaufgabe beinhaltet. Auf diese Weise können die individuellen Reaktionen auf die institutionellen Parameter im Rahmen eines sequentiellen Innovationsprozesses simuliert werden. Die Ergebnisse des ersten Experiments bezüglich intellektueller Eigentumsrechte zeigen, dass diese einen negativen Effekt auf das Auftreten sequentieller Innovationen haben. Die Wohlfahrt sinkt durch das Vorhandensein von intellektuellen Eigentumsrechten signifikant um 20 bis 30 Prozent, da eine geringere Anzahl und weniger wertvolle Innovationen erstellt werden. Im zweiten Experiment werden die Effekte von Innovationswettbewerben untersucht. Im Ergebnis sinkt in beiden untersuchten Wettbewerben die Kooperationsbereitschaft, jedoch haben Innovationswettbewerbe weder Einfluss auf die Kooperationsneigung der Individuen noch auf die gesamte Innovationsaktivität. Das dritte Experiment analysiert die Effekte von Subventionen auf das Innovationsverhalten und auf die Kooperationstätigkeit. Im Ergebnis zeigt sich ein substantielles Crowding-Out von privaten Investitionen und – je nach Subventionsart – keine positiven, bzw. sogar negative Effekte auf die Wohlfahrt. Im abschließenden Kapitel wird die aktuelle Literatur zur experimentellen Innovationsforschung zusammengefasst und ihre Vor- und Nachteile diskutiert. Insgesamt wird für eine pragmatische Nutzung von Laborexperimenten plädiert, um die Ergebnisse etablierter Methoden in der Innovationsforschung durch diesen methodischen Ansatz zu bereichern

Transition to Green Mobility

학위논문(박사) -- 서울대학교대학원 : 공과대학 협동과정 기술경영·경제·정책전공, 2022. 8. 구윤모.신고전파의 유인된 혁신 접근법은 혁신이 수요와 상대요소가격 변화에 따라 그 속도와 방향이 결정된다고 보았으며, 기술 혁신에 있어서 수요의 역할을 강조하였다. 즉, 신기술이 도입되면 소비자의 수요로 혁신이 확산된다. 그러나 시장에서의 기존 기술의 상대적 우위, 높은 진입 비용 및 불확실성 등으로 인해 소비자의 의사결정 만으로는 사회적으로 최적의 수준까지 확산이 일어나지 않을 수 있다. 이로 인해 정부는 시장의 중재자로서 혁신의 확산을 위해 개입을 하게 되며 구체적인 정책 수단을 설계한다. 그렇다면 이러한 정부 개입이 소비자 선택과 시장에 어떤 영향을 미치며 어떤 결과를 초래하는가? 본 연구에서는 그린 모빌리티를 연구 대상으로 하여 시장유인적 (규제) 수단에 집중하였다. 자동차 산업은 대표적인 B2C 시장으로 소비자의 선호를 파악하여 신기술의 확산을 예측할 수 있으며, 연쇄 효과가 크기 때문에 산업 및 경제에 미치는 영향이 크다. 정부는 그린 모빌리티로 인해 야기되는 긍정적 외부효과 (환경 개선 및 신 산업 창출을 통한 경제 성장 등)를 기대하며 다양한 정책수단으로 신기술의 확산을 지원하고 있다. 본 연구에서는 친환경차 보급 정책수단 중 대표적으로 조세 및 보조금, 충전 인프라 설치 투자에 대하여 규제와 성장, 정책 효과성 그리고 형평성 측면에서 파급 효과를 분석하였다. 이산선택모형은 개인의 선호에 따라 제품 및 기술의 수요를 예측할 수 있는 대표적인 방법론이다. 그러나 제품 및 기술 간 대체효과에 치중하여 다른 산업과 경제 간의 연쇄효과를 파악하기 어렵다. 한편 계산가능한 일반균형모형은 경제 주체 간의 관계를 고려하여 경제 변수(가격 및 수요 등)의 변화를 광범위하게 분석한다. 그러나 일반균형모형은 기술에 대한 설명이 제한적이며, 시장 변화가 재화의 가격 및 수량에만 의존한다. 두 모형을 통합함으로써 이산선택모형은 일반균형모형의 결과를 내생적으로 반영하여 속성 수준의 보다 탄력적인 변화를 포착하고, 일반균형모형은 이산선택모형의 구체적인 기술 사양을 반영한 대체 관계를 구현할 수 있다. 따라서 본 연구에서는 구축된 통합모형을 바탕으로 개인 단위의 소비자 선호에 따른 수요 변동이 신기술의 확산과 국가 전체에 미치는 영향을 규명하고자 하였다. 결과적으로 전기차와 수소차의 확산은 경제 성장으로 이어졌다. 환경적인 측면에서 전기차 및 수소차로의 수요 전환에 따라 수송 부문의 배출량이 크게 감소하였다. 그러나 전 산업의 배출량은 총 생산 증가로 인해 오히려 증가하여, 수송 부문의 배출 저감 효과를 상쇄하는 반등 효과가 나타났다. 게다가 그린 모빌리티가 초기에 급증하는 경우 석탄 화력 발전 및 LNG 개질 위주의 수소 생산으로 인해 오히려 배출량이 증가하게 된다. 따라서 그린 모빌리티의 급진적인 수요 확산 이전에 친환경 발전이 전제 되어야 바람직한 환경 개선 효과를 관찰할 수 있다. 그린 모빌리티 보급을 위한 정책 수단의 주요 결과는 다음과 같다. 첫째, 조세가 부과됨에 따라 기업의 생산 비용은 증가할 수 있으나, 학습률에 따라 혁신이 이 비용을 상쇄하는 가능성은 훨씬 더 빠르게 증가할 수 있다. 즉, 조세와 같은 환경정책과 기업의 생산성을 높이는 기술정책을 동시에 시행할 때 보다 효과적인 결과를 얻을 수 있다. 둘째, 소비자를 대상으로 한 직접적인 경제적 인센티브인 보조금 정책 보다 보완재 시장으로서 인프라에 대한 투자가 신기술 확산 및 경제 성장에 더 긍정적인 영향을 준다. 즉, 보조금을 더 많이 주어 현재 시장을 확대하기 보다는 충전 인프라에 투자하여 미래 시장 환경을 개선하는 것이 장기적으로 국가 경제에 도움이 될 것으로 보인다. 마지막으로 보조금의 차등 지급은 단기적으로 저소득층의 소득 향상에 긍정적인 영향을 주지만, 장기적으로는 국가 경제 성장에 부정적인 영향을 초래한다. 보조금의 차등 지급은 궁극적으로 신기술의 보급을 늦추기 때문에 장기적으로 가계 소득 증가에 덜 도움이 되기 때문이다. 본 연구에서는 두 모형을 결합함으로써 개인의 기술 채택(technology adoption)에서부터 사회 전체를 대상으로 한 기술 확산(technology diffusion)의 혁신 과정을 관찰할 수 있었다. 게다가 이산선택모형 혹은 일반균형모형만 사용하여 정책을 테스트하는 경우 보다 두 모형을 통합한 현재의 프레임워크가 정부 정책의 영향을 더 정확하게 예측할 수 있으며, 정부의 의사결정에서 명확한 근거를 제시할 수 있을 것으로 보인다.The neoclassical-induced innovation approach views the speed and direction of innovation as being determined by changes in demand and relative factor prices and emphasizes the role of demand in technological innovation. In other words, innovation spreads from consumer demand with the introduction of new technologies into the market. However, the diffusion on a socially optimal level may not fully occur solely based on the decision-making of consumers due to the relative superiority of existing technologies, high entry costs and uncertainty. Consequently, the government intervenes in the diffusion of innovation and acts as a mediator in the market by designing specific policies to address the shortfalls. This study explored how the government’s intervention affects consumer choices and markets, as well as the consequences thereof. This study examined green mobility and focused on market-inducing (regulatory) measures. The automobile industry is a representative business-to-consumer market, and therefore, it is possible to predict the spread of new technologies by understanding consumer preferences. In anticipation of positive externalities (environmental improvement and economic growth through new industry creation), the government supports the diffusion of green mobility through various policy instruments. This study analyzed the ripple effects of regulation and growth, policy effectiveness and equity on tax and subsidy as well as investment in infrastructure as representative of green mobility dissemination policy measures. The discrete choice (DC) model is a representative methodology that can predict demand for products and technologies according to individual preferences However, it is difficult to grasp the cascading effect between other industries and the economy because it focuses on the substitution effect between products and technologies. On the contrary, the computable general equilibrium (CGE) model broadly analyzes changes in economic variables such as price and demand through considering the relationship between economic agents; however, the CGE model has a limited explanation of technology and market changes, depending on the price and quantity of goods. Through an integration of both models, it can be noted that the DC model captures more elastic changes in the attribute level by endogenously reflecting the results of the CGE model, whilst the CGE model implements a substitution relationship reflecting the specific technical specifications of the DC model. Therefore, using the integrated model, this study investigated the effect of demand fluctuations according to individual consumer preferences on the diffusion of new technologies within the whole country. Consequently, the proliferation of electric vehicles and hydrogen cars has led to economic growth. From an environmental point of view, the transport sector's CO2 emissions decreased significantly because of the shift in demand for electric and hydrogen vehicles. However, emissions from other industries increased owing to the increase in production output, resulting in a rebound effect that offset the emission reduction effect in the transport sector. In addition, if green mobility surges in the early stages, emissions will increase because of coal-fired power generation and hydrogen production centered on liquefied natural gas reforming. Therefore, an environmental benefit will only be observed when a clean power mix is a prerequisite before the demand for green mobility spreads. The impact of policy measures on green mobility dissemination is as follows. Firstly, the imposition of a tax may cause the cost of production for many companies to increase; however, depending on a learning rate, innovation may offset this cost rapidly. In other words, more effective results can be obtained when environmental policies such as taxation and technological policies that increase corporate productivity are implemented simultaneously. Secondly, investment in the complementary goods (infrastructure) market to improve the future market environment has proven to have a longer-term beneficial effect on the national economy than direct economic incentives (subsidies) for consumers. Finally, the differential payment of subsidies has a positive effect on the income improvement of the low-income class in the short-term; however, it is less beneficial to household income growth and national economic growth in the long-term as it slows the adoption of new technologies. By combining the two models in this study, it was possible to observe the innovation process from individual technology adoption to technology diffusion, targeting the entire economy. In addition to the above, the current framework that integrates the two models can more accurately predict the impact of government policies and provide a clear rationale for government decision-making than when testing policies using only an independent model.Abstract iii Contents vii List of Tables x List of Figures xi Chapter 1. Introduction 1 1.1 Research Background 1 1.2 Research Objectives 9 1.3 Research Outline 15 Chapter 2. Literature Review and Theoretical and Methodological Background 18 2.1 Theoretical Background 18 2.1.1 Debates on Environmental Regulation and Innovation 18 2.1.2 Transport Policy for the Diffusion of Green Mobility 21 2.2 Methodological Background 25 2.2.1 Demand Forecasting on Individual Level 25 2.2.2 General Equilibrium Theory 30 2.3 Assessment of the Effects of Technology Diffusion: Green Mobility 31 2.3.1 Environmental Effects 31 2.3.2 Economic Effects 34 2.4 Integrated Studies of Consumption Behavior in the Transport Sector 36 2.5 Limitations of Previous Studies and Contribution of the Dissertation 40 Chapter 3. Methodology 43 3.1 Discrete Choice Model 43 3.1.1 Conceptual Background 43 3.1.2 Method 45 3.2 CGE Model 52 3.2.1 Social Accounting Matrix 52 3.2.2 Model Structure 60 3.3 Model Linkage 79 3.3.1 Choice Probability 81 3.3.2 Household Sector 83 3.3.3 Industry (Private Car Service) Sector 88 Chapter 4. Empirical Analysis 92 4.1 DC and Integrated Model Results 92 4.1.1 DC Estimation Results 92 4.1.2 Comparison of DC Model and Integrated Model 95 4.2 Baseline Scenario Analysis 99 4.2.1 Scenario Description 99 4.2.2 Validation 106 4.2.3 Scenario Results 110 4.3 Scenario Analysis 1: Fuel Tax and Learning Effects 124 4.3.1 Scenario Description 124 4.3.2 Scenario Results 126 4.4 Scenario Analysis 2: Subsidy and Charging Infrastructure Investment 138 4.4.1 Scenario Description 138 4.4.2 Scenario Results 141 4.5 Scenario Analysis 3: Differential Subsidy Payment 148 4.5.1 Scenario Description 148 4.5.2 Scenario Results 150 Chapter 5. Conclusion 160 5.1 Concluding Remarks and Contributions of This Study 160 5.2 Limitations and Suggestions for Future Research 165 Bibliography 169 Appendix 1: Respondent’s Demographics in Conjoint Survey 190 Appendix 2: Classification of Industry in the CGE Model 191 Abstract (Korean) 192박

From Government to Regulatory Governance: Privatization and the Residual Role of the State

This paper reviews the state of thinking on the governance role of public ownership and control. We argue that the transfer of operational control over productive assets to the private sector represents the most desirable governance, due to the inherent difficulty for citizens to constrain political abuse relative to the ability of governments to regulate private activity. However in weak institutional environments the process needs to be structured so as to avoid capture of the regulatory process. The speed of transfer should be timed on the progress in developing a strong regulatory governance system, to which certain residual rights of intervention must be vested. After all, what are “institutions” if not governance mechanisms with some degree of autonomy from both political and private interests? The gradual creation of institutions partially autonomous from political power must become central to the development of an optimal mode of regulatory governance. We advance some suggestions about creating accountability in regulatory governance, in particular creating an internal control system based on a rotating board representative of users, producers and civil society, to be elected by a process involving frequent reporting and disclosure.Regulatory Governance, Privatization

TOWARD AGRICULTURAL ENVIRONMENTAL MANAGEMENT: APPLYING LESSONS FROM CORPORATE ENVIRONMENTAL MANAGEMENT

Many business firms both in the U.S. and abroad are practicing corporate environmental management. They are committed to improving the efficiency of material use, energy use and water use; to recycle; to make safer products and processes and to reduce their overall impact on the environment. In pursuing corporate environmental management, some businesses have found that the presumed tradeoff between profits and environmental quality does not always apply. Instead, by innovating and redesigning their products, processes, corporate culture, and organizational strategy, these firms have been able to improve environmental performance and add to profits. These improved profits are sometimes referred to as "innovation offsets" because they result from technological changes to reduce pollution which also reduce production costs (and/or improve productivity) and thereby "offset" the costs of compliance. The necessary technological innovation is pursued when firms take a dynamic investment perspective rather than presume a static tradeoff between profits and environmental quality.Environmental Economics and Policy,