Learning-by-doing and the costs of a backstop for energy transition and sustainability?
Learning-by-doing and the costs of a backstop for energy transition and sustainability? / Pierre-André Jouvet et Ingmar Schumacher. Ecole Polytechnique. Département d’économie, octobre 2011, 40 p. (cahier de recherche 2011-22)
We assess the impact of being able to substitute an unlimited but costly energy substitute (like wind, solar) for a non-renewable resource (like oil, coal) in a model of sustainable growth. The prospects for sustainability on the optimal path depend crucially on the costs of this substitute.Furthermore, the poorer a country, measured in terms of capital stock at a given point in time, the later it should switch to the renewable substitute, and the more likely it will be unsustainable. Taking learning-by-doing in account, we find that this leads to an earlier switching time but does not guarantee sustainability. (© the authors)