The climate policy discussions have moved beyond issues of scientific uncertainty to the realm of the path along which greenhouse gas abatement should be implemented. Reducing greenhouse gases will involve government intervention to spur greater carbon efficiency in the economy. This can be brought about through a variety of actions: standards in appliance, building, and transportation efficiency; imposition of carbon taxes so that consumers choose fuels which have lower carbon contents, and patterns of activity which are more carbon efficient; distribution of carbon emission permits which will limit the carbon dioxide that can be emitted nationally, and; investment in R&D for renewable energy technologies and energy efficiency. Surprising as it may seem, we do not have a clear idea of which, individual or combination, of intervention(s) above is the best route for obtaining climate policy goals. In fact, in our assessment of carbon dioxide abatement, we have not considered how policy induces technical change, thus bringing about more cost efficient technologies for meeting the objectives of the policy. In this research, the investigators will use historical data to study how past crises and regulations have brought about technological change. They will examine how the oil crisis lead to energy efficient gains and how the clean air act led to innovations in air pollution control technologies. The investigators also will examine issues in the theoretical treatment of technological change. The goal is to develop the insights and methods needed to inform policy assessment tools about how to differentiate between the different actions the government may take to bring about cost effective greenhouse gas mitigation.
