Centre for Development Economics
Department of Economics, Delhi School of Economics


Technology, R&D, Endogenous Substitution and Climate Change


Youngho Chang

Nanyang Technological University

Friday, 18th July 2014 at 3:00 PM

Venue : Seminar Room (First Floor)
Department of Economics, Delhi School of Economics

All are cordially invited

 We investigate how technological change via R&D affects resource use, economic growth and climate change. We construct an economic growth model with two sectors (Uzawa, 1961 and 1963) and multiple resources (Chakravorty et al, 1997), incorporating environmental constraints from climate change (Nordhaus, 1994, 2000 and 2002; Nordhaus and Popp, 1997; Popp, 2004 and 2006). Multiple resources appear to substitute with each other following the premise that the cheapest resource is used first. Technological change influences resource use through three channels: knowledge stock for energy, conversion efficiency, and energy price. Expenditure on energy R&D increases the energy knowledge stock and the conversion efficiency factor, which translates into converting raw energy to useful energy at a lower cost and leads to endogenous substitution in resource use. We also simulate the optimal trajectory of carbon tax rate derived from an optimal trajectory of carbon emissions and of temperature changes. The stock of energy knowledge appears to lower the peak of the temperature change and advances the peaking year.


back to seminars…