Kronenberg, Tobias2018-06-142018-06-142010-04Kronenberg, Tobias (2010). "Energy conservation, unemployment and the direction of technical change". Portuguese Economic Journal, 9(1):1-171617-982X (print)1617-9838 (online)http://hdl.handle.net/10400.5/15610This paper extends the model by Smulders and de Nooij (Resour Energy Econ 25:59–79, 2003), where technical change can be biased towards labour or energy, by assuming a monopolistic union and a government which pays unemployment benefits, collects wage taxes and sells emission permits. The extended model is applied to the analysis of environmental tax reforms. A reduction in the level of energy use yields a double dividend by lowering pollution and unemployment, while temporarily inducing energy-saving technical change. It moves the economy to a new balanced growth path where unemployment is permanently lower, but long-run growth is not aff ected. A reduction in the growth rate of energy use induces a persistent bias in technical change towards labour and reduces long-run growth.engUnemploymentDouble dividendDirected technical changeEnvironmental tax reformjournal article10.1007/s10258-009-0046-8