Diffusion of climate technologies

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This project focuses on technological diffusion and diffusion policies towards climate technologies within a partial and a macro-economic approach. Subproject 1 analyses barriers to market diffusion created by network externalities in the transport secto r. Network externalities may create multiple equilibria and carbon taxes can be insufficient to move the economy away from the inferior equilibrium. We analyse different subsidy schemes to hydrogen and/or electric cars. Policy rules will be constructed fo r the optimal timing of both subsidies and taxes. Subproject 2 explores voluntary agreements about emission reductions between the government and industries. Governments have made use of emission reduction agreements with industries as a supplement or as an alternative to more general policy instruments. We evaluate such agreements regarding their potential for achieving an optimal diffusion of technology. We use the Norwegian NOX Fund as an example, and aim to gain general insight which can give guidanc e to the use of such agreements also for CO2-emissions. Subproject 3 looks into the long-run effects of enforced adaptation to best-available-technology aiming to reduce emissions. If such policy measures are introduced as second-best tools for achieving climate ambitions, a crucial question is whether immediate emission reducing effects will last. Subproject 4 put emphasis on mechanisms of cross-border diffusion of climate technologies. We analyse diffusion processes within a general macroeconomic conte xt where technological development and diffusion are modelled. We grasp how diffusion of climate technologies and diffusion policies interplay with other markets and quantify welfare effects of different combinations of actual diffusion and emission polic ies. We look at Norway which is dependent on the outside world's knowledge base, and the rapidly growing China where climate aspects and development dividends of technological transfers are topical.