Climate change, directed technical change and exhaustible resources
Abstract
Recent decades have seen an increase in proven reserves partially driven by new extraction technologies such as fracking. Such innovation can not only affect extraction rates but also divert resources away from innovation in clean energy. We propose a model of directed technical change with innovation in extraction technologies which is able to replicate the recent trends in proven reserves. Our results highlight new mechanisms that affect the role of carbon taxes and clean R&D subsidies, generating significant implications for the design of climate policy.
Fields of Study & Subjects
Climate Change Policy and Economics
Global Energy and Sustainability Research
Energy
Environment
Economic Growth
Publication details
- Journal / source
- Economics Letters
- Volume
- 261
- Pages
- 112860–112860
- Publication date
- 7 February 2026
- Language
- EN