How Inertia and Limited Potentials Affect the Timing of Sectoral Abatements in Optimal Climate Policy
This paper investigates the optimal
timing of greenhouse gas abatement efforts in a
multi-sectoral model with economic inertia, each sector
having a limited abatement potential. It defines economic
inertia as the conjunction of technical inertia -- a social
planner chooses investment on persistent abating activities,
as opposed to choosing abatement at each time period
independently -- and increasing marginal investment costs in