Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/159694
Authors: 
Agliardi, Elettra
Sereno, Luigi
Year of Publication: 
2012
Series/Report no.: 
Quaderni - Working Paper DSE 855
Abstract: 
We develop a model on the optimal timing of switching from non-renewable to renewable energy sources with endogenous extraction choices under emission taxes and abatement costs. We assume that non-renewable resources are "dirty" inputs and create environmental degradation, while renewable resources are more environmentally friendly, although they may be more or less productive than the exhaustible resources. The value of the switching option from non-renewable to renewable resources is characterized. Numerical applications show that an increase in emission taxes, abatement costs or demand elasticity slows down the adoption of substitutable renewable resources, while an increase in the natural rate of resource regeneration, the stock of renewable resources or the relative productivity parameter speeds up the investment in the green technology.
JEL: 
D81
H23
Q28
Q38
Q40
Q50
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Working Paper

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