Transition to Clean Capital, Irreversible Investment and Stranded Assets / Rozenberg, Julie
Contributor(s): Resource type: Ressourcentyp: Buch (Online)Book (Online)Language: English Publisher: Washington, D.C : The World Bank, 2014Description: Online-Ressource (29 p)Additional physical formats: Rozenberg, Julie: Transition to Clean Capital, Irreversible Investment and Stranded Assets DOI: DOI: 10.1596/1813-9450-6859Online resources: Summary: This paper uses a Ramsey model with two types of capital to analyze the optimal transition to clean capital when polluting investment is irreversible. The cost of climate mitigation decomposes as a technical cost of using clean instead of polluting capital and a transition cost from the irreversibility of pre-existing polluting capital. With a carbon price, the transition cost can be limited by underutilizing polluting capital, at the expense of a loss in the value of polluting assets (stranded assets) and a drop in income. In contrast, policy instruments that focus on redirecting investments-such as feebates or environmental standards-prevent underutilization of existing capital, avoid stranded assets, and reduce short-term losses; but they reduce emissions more slowly and increase the intertemporal cost of the transition. The paper investigates inter- and intra-generational distributional impacts and the political acceptability of climate change mitigation policy instrumentsPPN: PPN: 834982447Package identifier: Produktsigel: ZDB-1-WBA | ZDB-110-WBLNo physical items for this record
2014. (World Bank eLibrary) |2014||||||||||