Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171514
Authors: 
Heinzel, Christoph
Winkler, Ralph
Year of Publication: 
2007
Series/Report no.: 
Economics Working Paper Series 07/71
Abstract: 
In a dynamic general equilibrium model we study the interplay between gradual and structural change in the transition to a low-carbon energy industry. We focus on the welfare-theoretic consequences of diverging social and private rates of time preference and a time-to-build feature in capital accumulation. Both features are particularly important in the transformation of energy systems. We show that only a combination of environmental and technology policies can achieve a socially optimal transition. We thus provide a new reason for environmental regulation to be complemented by technology policy such as a non-distortionary investment subsidy.
Subjects: 
environmental and technology policy
social vs. individual rates of time preference
time to build
gradual vs. structural technological change
energy industry
JEL: 
H23
Q48
H43
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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