Minisymposium Presentation

The green energy transition is necessary within the next few decades to mitigate climate change.In the paper, I explore the effectiveness of carbon pricing and the role of technological spillovers inachieving decarbonization, with a particular focus on the challenges faced by developing countries.I develop a two-region integrated assessment model that incorporates fossil fuel and renewableenergy sources to investigate the quantitative impact of spillovers on decarbonization in developingcountries. In solving the model, I rely on the deep equilibrium nets as a global solution method. The findings indicate that technological spillovers in developing countries contribute tothe replacement of fossil fuels with renewable energy inputs. The study suggests that implementingcarbon taxation in both advanced and developing regions, along with technological spillovers, yieldsthe most favorable outcomes for the climate. However, the absence of carbon tax in developingcountries with spillovers still delivers slightly better environmental results compared to taxing bothregions without spillovers. The results emphasize the importance of considering spillovers andcarbon taxation when designing effective policies to achieve environmental goals.