What Really Matters: Discounting, Technological Change and Sustainable Climate

Müller-Fürstenberger, Georg; Stephan, Gunter (May 2010). What Really Matters: Discounting, Technological Change and Sustainable Climate (Discussion Papers 10-08). Bern: Department of Economics

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This paper discusses the interplay between the choice of the discount rate, greenhouse gas
mitigation and endogenous technological change. Neglecting the issue of uncertainty it is
shown that the green golden rule stock of atmospheric carbon is uniquely determined, but is
not affected by technological change. More general it is shown analytically within the
framework of a reduced model of integrated assessment that optimal stationary stocks of
atmospheric carbon depend on the choice of the discount rate, but are independent of the
stock of technological knowledge. These results are then reinforced numerically in a fully
specified integrated assessment analysis.

Item Type:

Working Paper

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Müller-Fürstenberger, Georg and Stephan, Gunter

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

Series:

Discussion Papers

Publisher:

Department of Economics

Language:

English

Submitter:

Lars Tschannen

Date Deposited:

15 Oct 2020 10:52

Last Modified:

15 Oct 2020 10:52

JEL Classification:

Q40, O13

BORIS DOI:

10.7892/boris.145729

URI:

https://boris.unibe.ch/id/eprint/145729

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