Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/79658
Authors: 
Daubanes, Julien
Grimaud, André
Rougé, Luc
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper 4334
Abstract: 
We borrow standard assumptions from the non-renewable-resource-taxation and from the directed-technical-change literatures, to take a full account of the incentives to perform R&D activities in a dirty-resource sector and in a clean-resource-substitute sector. We show that a gradual rise in the subsidies to clean R&D activities causes a less rapid resource extraction, because it enhances the long-run resource productivity. Our result contradicts the green-paradox conjecture that technical improvements in resource substitutes accelerate resource extraction. Sector-specific innovation activities are tantamount to competing economic projects; general equilibrium with several R&D sectors implies no-arbitrage conditions that give rise to not-so-intuitive results.
Subjects: 
non-renewable resources
directed technical change
green paradox
environmental policy
R&D subsidies
JEL: 
Q32
O32
O41
Document Type: 
Working Paper

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