Table of Contents

Technology and the Economics of Climate Change Policy

Foreword      ii

Executive Summary     iii

I. Introduction   1

II. What is the Technological Change Issue?   3

A. How Technological Change Affects the Economy   5
B. How Technological Change Affects Carbon Emissions   8
C. An Unknown Technological Future   9

III. How Technological Change Appears in Economic Models of 
         Climate Change   12

A. Taxonomy Used to Characterize Economic Models   12
B. Taxonomy Used to Describe Technological Change in Economic Models   14
C. Costs in Economic Models of Climate Change   16

IV. How Technological Change Affects Greenhouse Gas Mitigation
          Cost Estimates   18

A. Model Assumptions Matter   18
B. Additional Technological Change Lowers Mitigation Costs   20
C. All Future Technological Change is a Matter of Assumption   22
D. The Form of Technological Change Used Affects Costs   22
E. Modeling Endogenous Technological Change is Important, but Difficult   23

V. Conclusions   27

Endnotes   30