Economic growth and choice of energy: A simplistic strategic approach

Jacob Engwerda, T. Michalak

Research output: Contribution to journalArticleScientificpeer-review

2 Citations (Scopus)

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.
Original languageEnglish
Pages (from-to)321-342
JournalEnvironmental Modeling and Assessment
Volume20
Issue number4
DOIs
Publication statusPublished - Aug 2015

Keywords

  • climate change
  • economic growth
  • dynamic games
  • green versus fossil energy

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