ANALYZING ECONOMIC IMPACTS OF CO2 ABATEMENT AND R&D PROMOTION IN JAPAN APPLYING A DYNAMIC CGE MODEL WITH ENDOGENOUS TECHNOLOGICAL CHANGE

摘要

This study proposes to develop a dynamic general equilibrium model that considers endogenous technological change and to analyze the economic impacts of a climate change measure using it. In order to focus on the relationships between the measure and its impacts in Japan, it is a single country model targeting the Japanese economy. Endogenous technological change is modeled as the accumulation of knowledge capital which is derived from research and development (R&D) investment. As a result, negative effects on GDP and household consumption are observed when only abatement of CO2 emissions is implemented and the effects become more severe according to the amount of abatement, despite technological change being promoted. However, when emission abatement and subsidies on R&D investment are implemented simultaneously, it is indicated that there is a possibility of positive effects on both GDP and household consumption compared to the base case through further acceleration of R&D investment and the accumulation of knowledge capital. Similar tendencies are observed in sensitivity analysis for some key parameters.