Essays on endogenous technical change in climate policy analysis
Creators: name: Jin, Wei
Publisher: name: The Australian National University
Year: 2013
Subjects: subject: Climatic changes Government policy.
subject: Equilibrium (Economics) Mathematical models
subject: Climatic changes International cooperation
subject: Climatic changes Technological innovations

description: This thesis consists of four papers studying endogenous technical change (TC) in climate policy analysis. The first paper provides a conceptual framework of analyzing the mechanism through which TC can be induced by climate mitigation policies. The second paper develops a computable general equilibrium (CGE) numerical model to quantitatively analyze the effect of endogenous TC on the timing and cost of carbon abatements. The third paper develops a multi-region modelling framework to examine the mechanism of international technology diffusion and its effect on domestic carbon savings. The fourth paper analyzes the mechanism of international technology coordination resulting from reciprocal cross-nation knowledge spillovers and its effect on global climate governance. The first paper, "Revisiting the mechanism of endogenous technical change for climate policy analysis", aims to reconcile the diverging specifications of endogenous TC in existing climate policy modeling literature. Drawing on the theory of R&amp;D-induced TC, I provide a generalized framework to analyze the mechanism through which TC can be induced by climate mitigation policies. The second paper, "Can technological innovation help China take on its climate responsibility? A computable general equilibrium analysis", examines the effectiveness of China's indigenous R&amp;D and technological innovation to cut its carbon emissions. The mechanism of endogenous TC is incorporated into a CGE numerical model. R&amp;D investment and knowledge creation is modeled as the endogenous behavior of profit-seeking private producers. The accumulated stocks of productive knowledge are applied in a production process to induce the rate and bias of production TC. The third paper, "Can China harness globalization to reap domestic carbon savings? Modelling international technology diffusion in a multi-region framework", aims to examine the effect of globalization, particularly international technology diffusion, on reducing China's domestic carbon emissions. The single-country CGE model is extended into a multi-region framework, where both indigenous R&amp;D and foreign technology diffusion are explicitly considered as two sources of endogenous TC for domestic carbon savings. The model systematically describes foreign technology diffusion through three diffusion channels of trade, foreign direct investment (FDI) and disembodied knowledge spillovers, with an elaborate treatment of local knowledge absorptive capacity. The fourth paper, "International knowledge spillover and technology externality: Why multilateral R&amp;D coordination matter for global climate governance", investigates the mechanism of international technology cooperation and its effect on lowering global climate mitigation cost, with an aim of exploring the potentials of complementing international emission-based agreements with technology cooperation in the post-2012 climate regime. For that purpose, this paper firstly presents an analytical framework that describes how the mechanism of international R&amp;D coordination can work for climate change mitigation. This mechanism is then quantitatively examined in a multi-region global numerical model that explicitly considers multilateral knowledge spillovers and resulting technology externality for global climate governance.