Conference Agenda
Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).
Please note that all times are shown in the time zone of the conference. The current conference time is: 10th Sept 2026, 07:05:36pm CEST (Norway)
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Daily Overview |
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Economic implications of climate policy Location: Auditorium K Session Chair: Peter Kruse-Andersen, University of Copenhagen | |
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Capital Adjustment Costs and Stranded Assets in an Optimal Green Energy Transition 1: Humboldt University of Berlin; 2: World Bank; 3: TU Wien We study green energy transitions in a three-sector growth model with a binding carbon budget. In the long run, clean and dirty energy are perfect substitutes, but their short-run substitutability is finite and endogenously determined by capital adjustment costs. Of three available means of CO2 emissions reduction – reduction in energy consumption, redeployment of labor, and new investment – the most important is the investment channel. Ramsey optimal paths mandate front-loaded clean investment long before complete phase-out of dirty energy generation and robustly imply stranding of dirty energy capital when the carbon budget is exhausted. If optimally implemented, the amount of stranded capital is modest, even under an ambitious carbon budget at 2.7% of GDP. If the same shift to an ambitious carbon budget is postponed by a decade, stranded capital rises to 13% of annual GDP. | |