The Environment and Directed Technical Change: Comment

This paper discusses the growth model with environmental constraints recently presented in (Acemoglu et al., 2011) which focuses on the redirection of technical change by climate policies with research subsidies and a carbon tax. First, Acemoglu et al.'s model and chosen parameters yield numerical results that do not support the conclusion that ambitious climate policies can be conducted “without sacrificing (much or any) long-run growth”. Second, they select unrealistic key parameters for carbon sinks and elasticity of substitution. We find that more realistic parameters lead to very different results. Third, the model leads to an unrealistic conclusion when used to analyse endogenous growth, suggesting specification problems.Technological Change, Endogenous Growth, Climate, Energy Substitutability

Comprehensive Description of RESPONSE

This paper offers a comprehensive description of the integrated assessment model (IAM) RESPONSE developed at CIRED. RESPONSE aims at providing a consistent framework to appraise alternative modelling choices made by the main existing IAMs. It is designed as a flexible tool able to take different modelling structures in order to compare results from the modelling frameworks that have driven the so-called ''when flexibility'' controversy since the early 1990s dealing with the optimal timing of mitigation efforts and the optimal time profile of the social cost of carbon. RESPONSE is both sufficiently compact to be easily tractable and detailed enough to be as comprehensive as possible in order to capture a wide array of emblematic modelling choices, namely the forms of the damage function (quadratic vs. sigmoid) and the abatement cost (with or without inertia), the treatment of uncertainty, and the decision framework (one-shot vs. sequential).Ce document offre une description détaillée du modèle intégré RESPONSE, développé au CIRED. RESPONSE offre un cadre de modélisation cohérent pour intégrer et évaluer les divers choix de modélisation faits par la majorité des modèles intégrés déjà existants. C'est un outil flexible, à même par exemple d'adopter et de comparer les différentes structures de modélisation qui sont discutées dans la controverse, ouverte dès le début des années 1990, sur le calendrier optimal de la mitigation et le profil temporel de la valeur sociale du carbone. RESPONSE est à la fois suffisamment compact pour être aisément manié, et assez détaillé pour représenter un large spectre de possibilités de modélisations : différentes formes de la fonction de dommages (quadratique ou sigmoïdale), de la fonction de coût d'abattement (avec ou sans inertie), de la représentation de l'incertitude, et du processus de décision (à une période ou séquentielle)

The environment and directed technical change : comment

This paper discusses the growth model with environmental constraints recently presented in (Acemoglu et al., 2011) which focuses on the redirection of technical change by climate policies with research subsidies and a carbon tax. First, Acemoglu et al.'s model and chosen parameters yield numerical results that do not support the conclusion that ambitious climate policies can be conducted " without sacrificing (much or any) long-run growth ". Second, they select unrealistic key parameters for carbon sinks and elasticity of substitution. We find that more realistic parameters lead to very different results. Third, the model leads to an unrealistic conclusion when used to analyse endogenous growth, suggesting specification problems.Cet article analyse le modèle de croissance sous contraintes environnementales présenté par Acemoglu et al. (2011), lequel met l'accent sur la réorientation du changement technique au moyen de politiques climatiques combinant une taxe carbone et des subventions à la recherche. En premier lieu, le modèle de Acemoglu et al.'s avec les paramètres retenus fait ressortir des résultats numériques qui ne soutiennent nullement la conclusion selon laquelle des politiques climatiques ambitieuses peuvent être conduites " sans (guère ou pas du tout) sacrifier la croissance de long terme ". Par ailleurs, Acemoglu et al. ont choisi des valeurs irréalistes pour des paramètres cruciaux comme les puits de carbone ou l'élasticité de substitution. Des valeurs plus réalistes donnent des résultats très différents. En troisième lieu, utilisé pour analyser la croissance endogène, le modèle aboutit à des incohérences, ce qui suggère des problèmes de spécification

Cross-border Risks of a Global Economy in Mid-Transition

This paper analyzes the cross-border risks that could result from a decarbonization of the world economy. We develop a typology of cross-border risks and their respective channels. Our qualitative and quantitative scenario analysis suggests that the mid-transition – a period during which fossil-fuel and lowcarbon energy systems co-exist and transform at a rapid pace – could have profound stability and resilience implications for global trade and the international financial system

Modelling the redirection of technical change: The pitfalls of incorporeal visions of the economy

International audienceThis paper discusses attempts to represent the role of R&D in the transition towards a low carbon economy through models with no meaningful granularity to inform the studied phenomenon. By means of a critical analysis of (Acemoglu et al., 2012), we show that the advantage of these models, their analytical tractability, does not make up for their disadvantages, lack of control over policy implications and questionable numerical results. On the one hand, a comprehensive analysis of the results of Acemoglu et al. (2012) shows that even research subsidies do not pave the way for ambitious climate policies with low transitory costs, thus contradicting their policy message. On the other hand, critical parameters such as the elasticity of substitution between clean and dirty technologies, carbon sinks, or the productivity of researchers are not in accordance with existing scientific knowledge. We show that using more realistic parameters leads to even more pessimistic conclusions and that their model provides no leeway for overcoming them. We suggest that a too highly aggregated model can only describe an incorporeal economy and comes to a deadlock. We propose a more promising route for economic research in order to break this deadlock

The Environment and Directed Technical Change: Comment

This paper discusses the growth model with environmental constraints recently presented in (Acemoglu et al., 2011) which focuses on the redirection of technical change by climate policies with research subsidies and a carbon tax. First, Acemoglu et al.'s model and chosen parameters yield numerical results that do not support the conclusion that ambitious climate policies can be conducted “without sacrificing (much or any) long-run growth”. Second, they select unrealistic key parameters for carbon sinks and elasticity of substitution. We find that more realistic parameters lead to very different results. Third, the model leads to an unrealistic conclusion when used to analyse endogenous growth, suggesting specification problems

Financing Climate Change Adaptation in Viet Nam: A Perspective from the Field

International audienc