Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/85874
Year of Publication: 
2004
Series/Report no.: 
Tinbergen Institute Discussion Paper No. 03-019/3
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
As part of the Kyoto Protocol, many countries have committed themselves tosubstantially reduce the emission of greenhouse gases within a politically imposed timeconstraint. Investment subsidies can be an important instrument to stimulate the adoption ofenergy-saving technologies to achieve emission reduction targets. This paper addresses theimpact of adoption subsidies on the amount of energy savings, taking into account endogeneityand uncertainty of technological progress. Neglecting these two characteristics oftechnological progress tends to result in overestimation of the short-run effectiveness ofinvestment subsidies, whereas the effects on long-run effectiveness are ambiguous.
Subjects: 
energy efficiency
investing under uncertainty
subsidies
learning
investment timing.
JEL: 
Q40
O32
Document Type: 
Working Paper

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