Mariani, FabioSchrade, MariusMariusSchrade2025-05-142025-05-142025-05-142018https://hdl.handle.net/2078.2/7310In this thesis we study the transitional dynamics of an economy towards a climatesteady state in the presence of two capital stocks, namely dirty capital and carbon sequestration, irreversible investment and pollution. Based on the classic RamseyCass-Koopmans model and a version of the Lucas model, as presented by Barro and Sala-I-Martin (2003), we define a carbon sequestration model and introduce linearization and backwards integration techniques as means to solving it. We then proceed to calibrate a parameter set that would generate reasonable lengths of transitions paths. Further, we conduct a sensitivity analysis to investigate the effects that small parameter changes would have on our core variables, the consumptioncapital-ratio and the share of dirty capital, and on the length of the transition paths. Especially the sensitivity analysis emphasizes how susceptible the results can be to certain parameter changes, however, the model still generates reasonable outcomes.economic growthclimate changetext::thesis::master thesisthesis:17044