Publication:
Transition to Clean Capital, Irreversible Investment and Stranded Assets

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dc.contributor.authorRozenberg, Julie
dc.contributor.authorVogt-Schilb, Adrien
dc.contributor.authorHallegatte, Stephane
dc.date.accessioned2014-05-15T16:03:04Z
dc.date.available2014-05-15T16:03:04Z
dc.date.issued2014-05
dc.description.abstractThis paper uses a Ramsey model with two types of capital to analyze the optimal transition to clean capital when polluting investment is irreversible. The cost of climate mitigation decomposes as a technical cost of using clean instead of polluting capital and a transition cost from the irreversibility of pre-existing polluting capital. With a carbon price, the transition cost can be limited by underutilizing polluting capital, at the expense of a loss in the value of polluting assets (stranded assets) and a drop in income. In contrast, policy instruments that focus on redirecting investments -- such as feebates or environmental standards -- prevent underutilization of existing capital, avoid stranded assets, and reduce short-term losses; but they reduce emissions more slowly and increase the intertemporal cost of the transition. The paper investigates inter- and intra-generational distributional impacts and the political acceptability of climate change mitigation policy instruments.en
dc.identifierhttp://documents.worldbank.org/curated/en/2014/05/19457792/transition-clean-capital-irreversible-investment-stranded-assets
dc.identifier.doi10.1596/1813-9450-6859
dc.identifier.urihttps://hdl.handle.net/10986/18343
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 6859
dc.rightsCC BY 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectABATEMENT
dc.subjectABATEMENT COST
dc.subjectABATEMENT COSTS
dc.subjectAFFILIATED ORGANIZATIONS
dc.subjectALLOCATION
dc.subjectALLOWANCE
dc.subjectALLOWANCE ALLOCATION
dc.subjectARBITRAGE
dc.subjectASSETS
dc.subjectATMOSPHERE
dc.subjectATMOSPHERIC CONCENTRATION
dc.subjectCAPITAL COSTS
dc.subjectCAPITAL MARKETS
dc.subjectCAPITAL PRODUCES
dc.subjectCAPITAL STOCKS
dc.subjectCARBON
dc.subjectCARBON BUDGET
dc.subjectCARBON EMISSIONS
dc.subjectCARBON INTENSITY
dc.subjectCARBON POLICY
dc.subjectCARBON PRICE
dc.subjectCARBON PRICES
dc.subjectCARBON TAX
dc.subjectCARBON TAXES
dc.subjectCLEAN AIR
dc.subjectCLEAN ELECTRICITY
dc.subjectCLEAN ENERGY
dc.subjectCLEAN TECHNOLOGIES
dc.subjectCLIMATE
dc.subjectCLIMATE CHANGE
dc.subjectCLIMATE CHANGE MITIGATION
dc.subjectCLIMATE DAMAGES
dc.subjectCLIMATE OBJECTIVES
dc.subjectCLIMATE POLICIES
dc.subjectCLIMATE POLICY
dc.subjectCO
dc.subjectCO2
dc.subjectCOAL
dc.subjectCOAL PLANT
dc.subjectCOLLECTIVE ACTION
dc.subjectCONCENTRATION CEILING
dc.subjectCONSUMERS
dc.subjectCOST OF ABATEMENT
dc.subjectCOST OF CARBON
dc.subjectDAMAGES
dc.subjectDEPRECIATION
dc.subjectDEVELOPMENT POLICY
dc.subjectDISCOUNT RATE
dc.subjectDISCOUNT RATES
dc.subjectDISTRIBUTIONAL IMPACTS
dc.subjectECOLOGICAL ECONOMICS
dc.subjectECONOMIC CONDITIONS
dc.subjectECONOMIC EFFICIENCY
dc.subjectECONOMIC GROWTH
dc.subjectECONOMICS
dc.subjectELASTICITY
dc.subjectELASTICITY OF SUBSTITUTION
dc.subjectELECTRICITY PRODUCTION
dc.subjectEMISSION
dc.subjectEMISSION ALLOWANCES
dc.subjectEMISSION REDUCTIONS
dc.subjectEMISSIONS
dc.subjectENERGY ECONOMICS
dc.subjectENERGY EFFICIENCY
dc.subjectENERGY EFFICIENCY STANDARDS
dc.subjectENERGY INFRASTRUCTURE
dc.subjectENERGY INTENSITY
dc.subjectENERGY POLICY
dc.subjectENERGY SAVINGS
dc.subjectENERGY USE
dc.subjectENVIRONMENTAL ECONOMICS
dc.subjectENVIRONMENTAL POLICY
dc.subjectEQUILIBRIUM
dc.subjectEQUILIBRIUM ANALYSIS
dc.subjectEXTERNALITIES
dc.subjectEXTERNALITY
dc.subjectFINANCIAL MARKETS
dc.subjectFINANCIAL SUPPORT
dc.subjectFUNCTIONAL FORMS
dc.subjectGHG
dc.subjectGLOBAL EMISSIONS
dc.subjectGLOBAL WARMING
dc.subjectGREENHOUSE
dc.subjectGREENHOUSE EFFECT
dc.subjectGREENHOUSE GASES
dc.subjectGREENHOUSE GASES EMISSIONS
dc.subjectHUMAN CAPITAL
dc.subjectINCOME
dc.subjectINCOME EFFECT
dc.subjectINTEREST RATE
dc.subjectINTERGENERATIONAL EQUITY
dc.subjectINVESTMENT BEHAVIOR
dc.subjectINVESTMENT REGULATION
dc.subjectJOBS
dc.subjectLAISSEZ-FAIRE
dc.subjectLOW-CARBON
dc.subjectMARGINAL COST
dc.subjectMARGINAL PRODUCTIVITY
dc.subjectMARGINAL UTILITY
dc.subjectMARKET FAILURE
dc.subjectMULTIPLIERS
dc.subjectNEGATIVE EXTERNALITY
dc.subjectNOX
dc.subjectNUCLEAR POWER
dc.subjectPATENTS
dc.subjectPERFORMANCE STANDARD
dc.subjectPERFORMANCE STANDARDS
dc.subjectPOLITICAL ECONOMY
dc.subjectPOWER PLANTS
dc.subjectPRESENT VALUE
dc.subjectPRICE INCREASE
dc.subjectPRODUCTION FUNCTION
dc.subjectPROFITABILITY
dc.subjectPUBLIC GOODS
dc.subjectRATE OF RETURN
dc.subjectREBATES
dc.subjectREGULATORY CAPTURE
dc.subjectRELATIVE PRICE
dc.subjectRESOURCE ECONOMICS
dc.subjectSAVINGS
dc.subjectSECONDARY MARKETS
dc.subjectSHADOW PRICE
dc.subjectSHADOW PRICES
dc.subjectSOCIAL COST
dc.subjectSTRANDED ASSETS
dc.subjectSUBSTITUTION
dc.subjectSUBSTITUTION EFFECT
dc.subjectTAX
dc.subjectTAX REVENUE
dc.subjectTRADE SYSTEM
dc.subjectTRADE-OFF
dc.subjectUNEMPLOYMENT
dc.subjectUTILITY FUNCTION
dc.subjectUTILITY MAXIMIZATION
dc.subjectVOTERS
dc.subjectWEALTH
dc.subjectWIND
dc.titleTransition to Clean Capital, Irreversible Investment and Stranded Assetsen
dspace.entity.typePublication
okr.crosscuttingsolutionareaClimate Change
okr.crossref.titleTransition to Clean Capital, Irreversible Investment and Stranded Assets
okr.date.disclosure2014-05-01
okr.date.doiregistration2025-04-10T11:29:47.877217Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2014/05/19457792/transition-clean-capital-irreversible-investment-stranded-assets
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeEnvironment and Natural Resources
okr.guid768841468171252748
okr.identifier.doi10.1596/1813-9450-6859
okr.identifier.externaldocumentum000158349_20140506114857
okr.identifier.internaldocumentum19457792
okr.identifier.reportWPS6859
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/05/06/000158349_20140506114857/Rendered/PDF/WPS6859.pdfen
okr.topicEnvironment::Climate Change Mitigation and Green House Gases
okr.topicMacroeconomics and Economic Growth::Climate Change Economics
okr.topicEconomic Theory and Research
okr.topicMacroeconomics and Economic Growth::Political Economy
okr.topicMacroeconomics and Economic Growth::Investment and Investment Climate
okr.unitOffice of the Chief Economist, Climate Change Group
okr.volume1 of 1
relation.isAuthorOfPublicationef7c7b61-a9b3-579e-b957-0461412ced50
relation.isAuthorOfPublication464cf77e-5e05-5115-97fe-d40b61d3996e
relation.isAuthorOfPublication2fea2b63-4a74-5fbd-b964-71ef895df009
relation.isAuthorOfPublication.latestForDiscovery464cf77e-5e05-5115-97fe-d40b61d3996e
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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