Template-Type: ReDIF-Article 1.0
Author-Name:  Jonathan Kohler, Michael Grubb, David Popp and Ottmar Edenhofer  
Title:  The Transition to Endogenous Technical Change in 
Climate-Economy Models: A Technical Overview 
to the Innovation Modeling Comparison Project
Classification-JEL: F0
Pages:  17-56
Volume:  Endogenous Technological Change
Issue:  Special Issue #1
Year:  2006
Abstract:  This paper assesses endogenous technical change (ETC) in climate-economy models, using the models in the Innovation Modeling Comparison Project (IMCP) as a representative cross-section. ETC is now a feature of most leading models. Following the new endogenous growth literature and the application of learning curves to the energy sector, there are two main concepts employed: knowledge capital and learning curves. The common insight is that technical change is driven by the development of knowledge capital and its characteristics of being partly non-rival and partly non-excludable. There are various different implementations of ETC. Recursive CGE models face particular difficulties in incorporating ETC and increasing returns. The main limitations of current models are: the lack of uncertainty analysis; the limited representation of the diffusion of technology; and the homogeneous nature of agents in the models including the lack of representation of institutional structures in the innovation process.
Handle: RePEc:aen:journl:2006SE-a02
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