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 loss in the value of polluting assets (stranded assets) and a drop in income. In contrast, policy instruments that focus on redirecting investments -- such as feebates or environmental standards -- prevent underutilization of existing capital, avoid stranded assets, and reduce short-term losses; but they reduce emissions more slowly and increase the intertemporal cost of the transition. The paper investigates inter- and intra-generational distributional impacts and the political acceptability of climate change mitigation policy instruments.
Detalhes
-
Autor
Hallegatte,Stephane, Rozenberg,Julie, Vogt-Schilb,Adrien Camille
-
Data do documento
2014/05/01
-
TIpo de documento
Documento de trabalho sobre pesquisa de políticas
-
No. do relatório
WPS6859
-
Nº do volume
1
-
Total Volume(s)
1
-
País
-
Região
-
Data de divulgação
2014/05/01
-
Disclosure Status
Disclosed
-
Nome do documento
Transition to clean capital, irreversible investment and stranded assets
-
Palavras-chave
marginal utility of consumption;climate change mitigation policy;corporate average fuel economy;marginal productivity of capital;carbon price;carbon tax;coal power plant;climate mitigation policies;capital depreciation rate;types of capital;social welfare given;renewable power plant;greenhouse gas emission;rental rate;shadow price;steady state;stranded asset;market price;carbon emission;social optimum;rental price;secondary market;carbon budget;Performance Standards;social planner;present value;Political Economy;political acceptability;sustainable level;investment cost;maximization program;short-term impact;short term impact;capital accumulation;investment regulation;climate policy;high emissions;capital produce;irreversible investment;optimal policy;capital stock;equity issue;climate objectives;target lead;development path;free emission;perfect substitute;investment standard;social cost;Cash Transfer;production capacity;lump-sum tax;residual carbon;capital equal;pollution externality;monetary impact;electric plant;classical result;shadow value;initial capital;net investment;emission allowance;electric car;utility function;extensive use;mitigation cost;purchase goods;automobile sector;pollution emission;negative externality;global welfare;intergenerational equity;development policy;open access;investment irreversibility;balanced growth;Environmental Policy;saving rate;asset price;consumption loss;capital utilization;environmental standard;atmospheric concentration;market failure;relative price;automobile industry;small stock;knowledge spillover;global emission;
- Exibir mais
Downloads
COMPLETAR RELATÓRIO
Versão oficial do documento (pode conter assinaturas, etc.)
- PDF oficial
- TXT*
- Total Downloads** :
- Download Stats
-
*A versão do texto é um OCR incorreto e está incluído unicamente em benefício de usuários com conectividade lenta.