Endogenous Technology and Tradable Emission Quotas

We study an international climate agreement that assigns emission quotas to each participating country. Unlike the simplest models in the literature, we assume that abatement costs are affected by R&D activities undertaken in all firms in all countries, i.e. abatement technologies are endogenous. In line with the Kyoto agreement we assume that the international climate agreement does not include R&D policies. We show that for a second-best agreement, marginal costs of abatement should exceed the Pigovian level. Moreover, marginal costs of abatement differ across countries in the second-best quota agreement with heterogeneous countries. In other words, the second-best outcome cannot be achieved if emission quotas are tradable.Climate Policy, International Climate Agreements, Emission Quotas, Technology Spillovers

Climate Agreements and Technology Policy

We study climate policy when there are technology spillovers within and across countries, and the technology externalities within each country are corrected through a domestic subsidy of R&D investments. We compare the properties of international climate agreements when the inter-country externalities from R&D are not regulated through the climate agreement. With an international agreement controlling abatements directly through emission quotas, the equilibrium R&D subsidy is lower that the socially optimal subsidy. The equilibrium subsidy is even lower if the climate agreement does not specify emission levels directly, but instead imposes a common carbon tax. Social costs are higher under a tax agreement than under a quota agreement. Moreover, for a reasonable assumption on the abatement cost function, R&D investments and abatement levels are lower under a tax agreement than under a quota agreement. Total emissions may be higher or lower in a second-best optimal quota agreement than in the first-best optimum.Climate policy, International environmental agreements, R&D Policy, Technology spillovers

Climate Policy under Technology Spillovers

Technological development is likely to play an important role in curbing growth in greenhouse gas emissions. It is therefore important to incorporate factors influencing technological change in climate policy analyses. This paper studies climate policy when there are technology spillovers between countries, and there is no instrument that (directly) corrects for these externalities. The lack of an appropriate instrument reflects that R&D expenditures in a country are difficult to verify by other countries. We show that without an international agreement, the non-cooperative outcome will have too much emissions and too little R&D expenditures compared with the social optimum. While the non-cooperative equilibrium depends on whether countries use tradable quotas or carbon taxes as their domestic instruments for controlling emissions, all countries are better off in the tax case than in the quota case. Next we study two types of international climate agreements with full participation. One is a Kyoto type of agreement where each country is assigned a specific number of internationally tradable quotas. In the second type of agreement a common carbon tax should be used domestically in all countries. We show that none of the cases satisfy the conditions for the social optimum. Even if the total number of quotas is set so that the quota price is equal to the Pigovian level, R&D investments will be lower than what is socially optimal in the Kyoto case, whereas with a harmonized domestic carbon tax R&D expenditures could even be too high. Finally we examine the case in which there is an incomplete agreement, i.e. some countries have not signed the agreement. We demonstrate that there is virtually no difference between this case and the case of full cooperation.Climate policy, international environmental agreements, R&D, technology spillovers

International Cooperation on Climate-Friendly Technologies

We examine international cooperation on technological development as a supplement to, or an alternative to, international cooperation on emission reductions. R&D should be increased beyond the non-cooperative level if (i) the technology level in one country is positively affected by R&D in other countries, (ii) the domestic carbon tax is lower than the Pigovian level, or (iii) the domestic carbon tax is set directly through an international tax agreement. A second-best technology agreement has higher R&D, higher emissions, or both compared with the first-best-outcome. The second-best subsidy always exceeds the subsidy under no international R&D cooperation. Further, when the price of carbon is the same in the second-best technology agreement and in the case without R&D cooperation, welfare is highest, R&D is highest and emissions are lowest in the second-best R&D agreement.climate policy, international climate agreements, R&D policy, technology spillovers

Climate Policy without Commitment

Climate mitigation policy should be imposed over a long period, and spur development of new technologies in order to make stabilization of green house gas concentrations economically feasible. The government may announce current and future policy packages that stimulate current R&D in climate-friendly technologies. However, once climate-friendly technologies have been developed, the government may have no incentive to implement the pre-announced future policies, that is, there may be a time inconsistency problem. We show that if the government can optimally subsidize R&D today, there is no time inconsistency problem. Thus, lack of commitment is not an argument for higher current R&D subsidies. If the offered R&D subsidy is lower than the optimal subsidy, the current (sub-game perfect) climate tax should exceed the first-best climate tax.time consistency, carbon tax, climate policy, R&D, endogenous technological change

Are Carbon Prices Redundant in the 2030 EU Climate and Energy Policy Package?

In 2018, an agreement between the key EU institutions—the Commission, the European Parliament, and the European Council—was reached after a long-lasting discourse over the 2030 EU climate and energy policy package. This paper offers a comprehensive assessment of the EU package, with its three main targets: lower greenhouse gas emissions, higher renewable share in final energy consumption, and improved energy efficiency. We find that the renewable and energy efficiency targets have been set so high that the derived emissions reduction (50 percent) exceeds the EU climate target (40 percent). Hence, there is no need for an EU climate policy, for example, to use carbon prices to reach the EU climate goals. It is, however, not cost-efficient to achieve the climate target by imposing the three EU targets. We demonstrate that a cost-efficient policy that obtains a 50 percent GHG emissions reduction would increase annual welfare (relative to the Reference scenario) by an amount corresponding to 0.6 percent of GDP in Europe.publishedVersio

Entreprenørskap i Norge - mest for menn?

I Norge er bare én av fire entreprenører kvinner. I denne artikkelen benytter vi administrative registerdata til å lete etter årsaker til dette kjønnsgapet. Vi finner at ulikhet i kvinners og menns bransjetilhørighet kan forklare opp mot 30 % av forskjellen, men at andre kjennetegn – slik som utdanningsvalg og lønnsnivå som sysselsatt – trekker i motsatt retning. Alt i alt er det derfor bare om lag 20 % av kjønnsgapet som forklares av observerte kjennetegn. Basert på den eksisterende forskningslitteraturen er det nærliggende å anta at de resterende kjønnsforskjellene i noen grad avspeiler systematiske forskjeller mellom kvinner og menn med hensyn til risikoaversjon og konkurransevilje.acceptedVersio

Friere energimarkeder i Vest-Europa

Økonomiske analyser er tilgjengelige via www.ssb.noDe vest-europeiske energimarkedene er i ferd med å liberaliseres. Dette vil isolert sett medføre betydelige prisreduksjoner og økt forbruk av elektrisitet i Vest-Europa. Mesteparten av den økte kraftproduksjonen vil i så fall komme fra gamle og nye kullkraftverk, noe som vil gi store økninger i CO2-utslippene i Europa. Bruk av CO2-avgifter vil kunne motvirke utslippsøkningen, samtidig som elektrisitetsprisene for husholdninger og industri fortsatt er betydelig lavere enn før liberaliseringen. Friere energimarkeder vil også medføre lavere gasspriser til forbrukere. Mindre markedsmakt i transportleddet kan likevel føre til økt lønnsomhet i norsk gassproduksjon, ikke minst hvis CO2 -avgifter innføres

Modellering av usikkerhet i numeriske likevektsmodeller med stokastisk scenariometode :

publishedVersio