An integrated assessment model with endogenous technology is described. Optimal policy involves a clean transition using both carbon tax and clean research subsidy instruments. The paper explores each instrument’s relative performance when acting alone, helping to explain different outcomes in...

This paper uses a benchmark climate model with endogenous technical change to consider the effects of three extensions on optimal policy under a clean transition. First, the movement of workers between non-energy and energy sectors lowers the cost of abatement by more than an order of magnitude,...