Browsing by Author "Narajabad, Borghan"

Now showing 1 - 3 of 3
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    Renewable Technology Adoption Costs and Economic Growth
    (2022) Adao,Bernardino; Narajabad, Borghan; Loch-Temzelides, Ted P.; James A. Baker III Institute for Public Policy
    We develop a dynamic general equilibrium integrated assessment model that incorporates costs due to new technology adoption in renewable energy as well as externalities associated with carbon emissions and renewable technology spillovers. We use world economy data to calibrate our model and investigate the effects of the technology adoption channel on renewable energy adoption and on the optimal energy transition. The calibrated model implies several interesting connections between technology adoption costs, the two externalities, and welfare. We investigate the relative effectiveness of two policy instruments — Pigouvian carbon taxes and policies that internalize spillover effects — in isolation as well as in tandem. Our findings suggest that renewable technology adoption costs are of quantitative importance for the energy transition. We find that the two policy instruments are better thought of as complements rather than substitutes.
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    Robust Dynamic Energy Use and Climate Change
    (2015) Li, Xin; Narajabad, Borghan; Loch-Temzelides, Ted P.; James A. Baker III Institute for Public Policy
    We study a dynamic stochastic general equilibrium model in which agents are concerned about model uncertainty regarding climate change. An externality from greenhouse gas emissions damages the economyﾒs capital stock. We assume that the mapping from climate change to damages is subject to uncertainty, as opposed to risk, and we use robust control theory to study efficiency and optimal policy. We obtain a sharp analytical solution for the implied environmental externality and characterize dynamic optimal taxation. The optimal tax that restores the socially optimal allocation is Pigouvian. We study optimal output growth in the presence and in the absence of concerns about model uncertainty and find that these can lead to substantially different conclusions regarding the optimal emissions and the optimal mix of fossil fuel.
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    Robust dynamic energy use and climate change
    (Wiley, 2016) Li, Xin; Narajabad, Borghan; Temzelides, Ted; James A. Baker III Institute for Public Policy
    We study a dynamic stochastic general equilibrium model in which agents are concerned about model uncertainty regarding climate change. An externality from greenhouse gas emissions damages the economy's capital stock. We assume that the mapping from climate change to damages is subject to uncertainty, as opposed to risk, and we use robust control to study efficiency and optimal policy. We obtain a sharp analytical solution for the implied environmental externality and characterize dynamic optimal taxation. The optimal tax that restores the socially optimal allocation is Pigouvian. We study optimal output growth in the presence and in the absence of concerns about model uncertainty, and find that these can lead to substantially different conclusions regarding the optimal emissions and the optimal mix of fossil fuel. In particular, the optimal use of coal will be significantly lower on a robust path, while the optimal use of oil/gas will edge down.