Economic growth and choice of energy: A simplistic strategic approach
Engwerda,Jacob Michalak,T.
Engwerda,Jacob
Michalak,T.
Abstract
In this paper, we present a simplistic dynamic model to analyze the tradeoff between the use of environment-friendly energy and the use of environment-polluting energy in a dynamic world characterized by players that have different interests. Our approach builds upon a neoclassical growth model, integrating different economies, and including pollution as a separate growth factor. The model is cast in a differential game framework with the open-loop information structure. In this setting, we analyze the impact of pollution over time on the fossil fuel/“green” energy ratio. Furthermore, based on a simulation study for the linearized model, we consider the question whether certain cooperative arrangements between countries having different interests can be expected in case pollution shocks occur.
Description
Date
2015-08
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Publisher
Research Projects
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Keywords
climate change, economic growth, dynamic games, green versus fossil energy, SDG 7 - Affordable and Clean Energy, SDG 8 - Decent Work and Economic Growth
Citation
Engwerda, J & Michalak, T 2015, 'Economic growth and choice of energy : A simplistic strategic approach', Environmental Modeling & Assessment, vol. 20, no. 4, pp. 321-342. https://doi.org/10.1007/s10666-014-9431-5