TY  - JOUR
TI  - Abandoning Fossil Fuel: How much and how fast?
AB  - Keeping climate change within limits requires that most of the available carbon-based energy sources need to be abandoned underground. We study how fast and how much this transition to carbon-free energy needs to occur within a welfare-maximizing Ramsey growth model of climate change. Our model also addresses the market failure in the development of clean energy which leads to an under-provision of renewable energy, delays the transition time to the carbon-free era and reduces the amount of dirty fuels locked up in situ. Optimal policy requires an aggressive renewables subsidy in the near term and a gradually rising carbon tax which falls in long run. We also study the transition timing and the performance of recently proposed policy rules for the carbon tax.
DO  - http://dx.doi.org/10.1111/manc.12189
SP  - 16
EP  - 44
PY  - 2017-01-01
JO  - The Manchester School
AU  - Rezai, Armon 
AU  - van der Ploeg, Frederick 
ER -