The Unassuming Economist

From a paper by Amit Roy, Pu Chen, and Willi Semmler Sr:

“In European countries carbon pricing is often viewed as a primary strategy to combat climate change and climate risks by reducing carbon emissions and driving investment into cleaner energy sources. Decarbonization has also been suggested by directed technical change, which implements innovative renewable energy technology. We study the eectiveness of both policies for selected Northern EU countries. In a model-based investigation we rst compare optimizing and behavioral drivers of decarbonization with a focus on the two decarboniza-tion policies. Econometrically we employ Local Projection and the VAR method to explore the eects of both policies, carbon tax and directed technical change on GDP and emission reduction. Our results show that though both policies are needed signicant technology-oriented policy actions on the supply side of renewable energy appear to be required to accelerate the decarbonization of the economies. We want to thank Tato Khundadze for extensive research assistance. We also want to thank two reviewers of the article and the editors of the journal for extensive comments.”