This dissertation consists of three essays on Economic Growth. The first essay introduces directed technical change in a growth model with environmental constraints. The final good is produced from ”dirty” and ”clean” inputs. We show that when inputs are sufficiently substitutable, sustainable growth can be achieved with temporary taxes/subsidies that redirect innovation towards clean inputs; and that delay in intervention is costly as it later necessitates a longer transition phase with slow growth. The second essay explains how unilateral environmental policies undertaken by a group of committed countries can ensure sustainable growth in the presence of directed technical change. There are two countries and two tradeable goods: a nonpolluting good and a polluting one, which, itself, is produced with a clean and a dirty input. Innovation can be targeted at the non-polluting sector, at clean or at dirty technologies. I show that sustainable growth can generally not be achieved by unilateral carbon taxes but can be achieved by a temporary unilateral combination of clean research subsidies and a tariff. I characterize the first best policy, the world optimal policy under the constraint that one country must be in laissez-faire, and the optimal policy from the viewpoint of a single country. The third essay shows that long-term relationships, which reduce the static costs associated with low contractibility, create dynamic inefficiencies. We consider the repeated interaction between final good producers and intermediate input suppliers, where the provision of the intermediate input is non contractible. Producer/supplier pairs can be good matches or bad matches (featuring lower productivity). We build a ”cooperative” equilibrium that features cooperation in good matches without any collusion amongst suppliers. We contrast this set-up with the Nash equilibrium where cooperation is precluded and a contractible setting. Every period one supplier has the opportunity to innovate. We show that innovations need to be larger to break up existing relationships in the cooperative case than in the contractible and Nash cases. The rate of innovation in the cooperative case is lower than in the contractible case, and can be lower than in the Nash case. / Economics

This paper studies the cost effectiveness of climate policy if there are technology externalities. For this purpose, we develop a forward-looking CGE model that captures empirical links between CO2 emissions associated with energy use, directed technical change and the economy. We find the cost-effective climate policy to include a combination of R&D subsidies and CO2 emission constraints, although R&D subsidies raise the shadow value of the CO2 constraint (i.e. CO2 price) because of a strong rebound effect from stimulating innovation. Furthermore, we find that CO2 constraints differentiated toward CO2-intensive sectors are more cost effective than constraints that generate uniform CO2 prices among sectors. Differentiated CO2 prices, through technical change and concomitant technology externalities, encourage growth in the non-CO2 intensive sectors and discourage growth in CO2-intensive sectors. Thus, it is cost effective to let the latter bear relatively more of the abatement burden. This result is robust to whether emission constraints, R&D subsidies or combinations of both are used to reduce CO2 emissions. / Abstract in HTML and technical report in PDF available on the Massachusetts Institute of Technology Joint Program on the Science and Policy of Global Change website (http://mit.edu/globalchange/www/).

Climate change must deal with two market failures: global warming and learning by doing in renewable energy production. The first-best policy consists of an aggressive renewables subsidy in the near term and a gradually rising and falling carbon tax. Given that global carbon taxes remain elusive, policy makers might have to rely on a second-best subsidy only. With credible commitment the second-best subsidy is higher than the social benefit of learning to cut the transition time and peak warming close to first-best levels at the cost of higher fossil fuel use in the short run (weak Green Paradox). Without commitment the second-best subsidy is set to the social benefit of learning. It generates smaller weak Green Paradox effects, but the transition to the carbon-free takes longer and cumulative carbon emissions are higher. Under first best and second best with pre-commitment peak warming is 2.1-2.3 °C, under second best without commitment 3.5 °C, and without any policy 5.1 °C above pre-industrial levels. Not being able to commit yields a welfare loss of 95% of initial GDP compared to first best. Being able to commit brings this figure down to 7%.

La prima parte della Tesi si occupa dello studio delle strategie di investimento ottime nel settore energetico e in ricerca e sviluppo, nell'ambito di politiche di stabilizzazione dei gas serra nell'atmosfera. La seconda parte tratta invece metodi per la quantificazione degli impatti economici dei cambiamenti climatici sul settore agricolo, considerando tutte le possibilità di adattamento. / The first part of the Thesis discusses optimal investment strategies in the energy sector and in R&D for knowledge advancements to stabilize atmospheric concentrations of GHG. The second part deals instead with the measurement of impacts of climate change on agriculture considering all possible adaptation options.