The Aggregate Effects of the Structure of Information in Low-Carbon Transition Policies : An Empirical Application

This paper analyses the impacts on growth of a low-carbon policy in the power sector depending on different structures of information available to agents - i.e., whether agents anticipate or not the future evolutions of energy policies and prices. We develop an empirical hybrid modelling that combines a General Equilibrium model with the optimization model of the power system developed by the French electricity Transmission System Operator. The results show that the effects of the low-carbon energy transition on decarbonation, growth and the non-environmental well-being of households (especially if non ricardian) depend significantly on the structure of information. The role of investment in durable goods and physical capital is important in our model to explain these differences in GDP and welfare between the two information structures. Ceteris paribus, an imperfect informational structure results in our model in a slower decarbonization of the economy and a higher economic growth