Economic Growth and the Transition to Renewable Energy

August 1, 2012

Working paper — This working paper analyzes when and how we should transition to green energy.

Authors: Willi Semmler, Lars Gruene and Alfred Greiner 

The authors argue that the transition to green energy can and should take place before non-renewable energy is exhausted. Their research uses a canonical growth model with two energy sources, including non-renewable energy that creates negative externalities in the form of CO2 emissions and renewable energy that emits much less CO2. Ultimately, the authors propose a solution that, given the cost of future externalities inherent in the continued use of fossil energy, recommends tax rates and subsidies to ensure a more rapid transition to renewable energy.

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