Optimal climate policy under exogenous and endogenous technical change: making sense of

The Institute is funded by the Grantham Foundation for the Protection of the Environment and a number of other sources. [...] The NW quadrant is the MAC curve, expressed as a proportion of GDP, which is static for the case without TC and decreasing over time in the case of TC. [...] The NW quadrant is the MAC curve, expressed as a proportion of GDP, which is static for the case without TC and decreasing over time in the case of TC. [...] price/tax and a technology deployment subsidy, the former is equal to the SCC and the latter to the endogenous future gain effect. [...] However, as indicated above, the relative contribution of the endogenous future gain effect to the optimal MAC/carbon price is smaller in most periods, because the Hotelling price is higher than the SCC in most periods, at $142/tCO2 in 2020, $171/tCO2 in 2030 and $310/tCO2 in 2050.