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Fossil Fuels, Stock Externalities, and Backstop Technology

Olli Tahvonen
The Canadian Journal of Economics / Revue canadienne d'Economique
Vol. 30, No. 4a (Nov., 1997), pp. 855-874
Published by: Wiley on behalf of the Canadian Economics Association
DOI: 10.2307/136274
Stable URL: http://www.jstor.org/stable/136274
Page Count: 20
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Fossil Fuels, Stock Externalities, and Backstop Technology
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Abstract

The Hotelling exhaustible resource model is extended to include stock pollution and non-polluting backstop technology. It is shown that an optimal energy consumption strategy typically includes a regime in which the two energy sources are consumed simultaneously. Along this regime, fossil fuel consumption decreases and backstop consumption increases. Together, fossil fuel and backstop consumption may form eleven optimal regime combinations. A decrease in the backstop price decreases the initial level of optimal emission tax. /// Combustibles fossiles, externalités cumulatives et technologie non-polluante. Le modèle de ressources non-renouvelables Hotelling a été étendu pour prendre en compte la pollution cumulative et la technologie non-polluante sans émissions carboniques. L'on montre que la stratégie de consommation optimale d'énergie inclut normalement un régime où les deux sources d'énergie sont consommées simultanément. Dans ce régime, la consommation du combustible fossile diminue et la consommation d'énergie non-carbonique augmente. Ensemble, la production d'énergie à base de combustibles fossiles et non-carbonique peut former onze combinations optimales de régimes. La diminution du prix de l'énergie non-carbonique diminue le niveau initial de la taxe optimale sur la pollution.

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