GTAP Resources: Resource Display
| GTAP Resource #7851 |
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"Capturing Capital Transition: A Multi-Vintage CGE Analysis of Carbon Intensity and Carbon Taxation" Authors: Ko, Sungmin, Yoonmo Koo and Yong-Gun Kim Abstract This study examines how the representation of capital heterogeneity influences the dynamic adjustment of carbon intensity and carbon taxation within a computable general equilibrium (CGE) framework. While conventional CGE models typically treat capital as a homogeneous stock, this assumption limits the ability to capture the gradual and path-dependent nature of technological transition. To address this limitation, this study extends the recursive dynamic LINKAGE model by disaggregating capital into multiple vintages, allowing for a more realistic representation of capital turnover and substitution dynamics across time. Simulation results highlight the critical role of capital vintage structure in shaping both sectoral and macroeconomic outcomes. In the short run, excess capacity delays new investment, leading to gradual reductions in carbon intensity driven by limited substitution within older capital. As investment resumes, newer vintages characterized by higher flexibility accelerate the decline in carbon intensity. A finer disaggregation of capital vintages enhances capital turnover, resulting in a larger share of cleaner new capital and a more pronounced reduction in emissions intensity over time. At the macroeconomic level, the degree of vintage disaggregation significantly affects carbon tax trajectories and GDP outcomes. Models with coarse capital representation require steeper increases in carbon taxes to meet emission targets, imposing higher economic costs. In contrast, models with detailed vintage structures exhibit smoother carbon tax paths and higher GDP levels, reflecting more efficient and gradual technological transition. |
| Resource Details () | GTAP Keywords | ||||||||||||||||
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- Climate change policy - Other data bases and data issues - Asia (East) |
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Public Access  GTAP Resource 7851 (804.1 KB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 4/20/2026 1:44:43 PM
