Transition to clean capital, irreversible investment and stranded assets (English)

This paper uses a Ramsey model with two types of capital to analyze the optimal transition to clean capital when polluting investment is irreversible. The cost of climate mitigation decomposes as a technical cost of using clean instead of polluting capital and a transition cost from the irreversibility of pre-existing polluting capital. With a carbon price, the transition cost can be limited by underutilizing polluting capital, at the expense of a...

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Author

Hallegatte,Stephane;

Rozenberg,Julie;

Vogt-Schilb,Adrien Camille;
Document Date
2014/05/01
Document Type
Policy Research Working Paper
Report Number
WPS6859
Volume No
1
Total Volume(s)
1
Country
World,
Region
Other,
Disclosure Date
2014/05/01
Disclosure Status
Disclosed
Doc Name
Transition to clean capital, irreversible investment and stranded assets
Keywords
marginal utility of consumption

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Citation

Hallegatte,Stephane; Rozenberg,Julie; Vogt-Schilb,Adrien Camille.

Transition to clean capital, irreversible investment and stranded assets (English). Policy Research working paper ; no. WPS 6859 Washington, DC: World Bank Group. http://documents.worldbank.org/curated/en/768841468171252748

Transition to clean capital, irreversible investment and stranded assets (English)

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