This paper presents a two-sector green endogenous growth model to explore a mechanism that explains why carbon-intensive capital is not necessarily shut down during transition to a green economy. Without accumulating clean capital to offset carbon emissions, a tightening of climate regulation...

This paper presents a two-sector green endogenous growth model to explore a mechanism that explains why carbon-intensive capital is not necessarily shut down during transition to a green economy. Without accumulating clean capital to offset carbon emissions, a tightening of climate regulation...

This paper discusses capital (dis)investments associated with climate regulations in green growth transitions. We first show an empirically confirmed stylized fact that carbon-intensive capital does not necessarily fall sharply with the stepping-of of clean capital investment. We then...