Chakravorty, Ujjayant; Leach, Andrew; moreaux, michel - Department of Economics, University of Alberta - 2009
We study how environmental regulation in the form of a cap on aggregate emissions from a fossil fuel (e.g., coal) affects the arrival of a clean substitute (e.g., solar energy). The cost of the substitute decreases with cumulative use because of learning-by-doing. We show that energy prices may...