Abstract
R&D industry is introduced into a CGE model (KEI-Linkages) as a means to mimic the endogenous technological progress in the Korean economy. We found that providing across-the-board subsidy on R&D expenditure may lead to an increase in the carbon intensity, as well as the real GDP for the Korean economy. However, when R&D subsidies are combined with a carbon tax, real GDP can grow without increasing CO2 emissions. Carbon tax on top of R&D subsidy represses the growth of carbon intensive industries compared to the case of stand-alone R&D subsidy policy. Furthermore, carbon intensive industries reduce carbon intensity by way of fuel mix change to cope with a higher carbon tax rate to meet the national CO2 reduction target. The final outcome impinges on the industry structure of the economy. Therefore, a careful study of the industry structure of the economy is warranted to maximize the effectiveness of climate change policy-mix.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
