Equilibrium model assumes finite resources with low-carbon investments displacing financial resources from other uses leading to an opportunity cost, while non-equilibrium models do not, assuming resource constraints do not apply (EC, 2016a and 2016b). However, once some mechanism is in place to internalise the environmental externality, there is no reason a priori to implement R&D support policies targeted specifically at low-carbon technologies. Yet, in theory, subsidies to private R&D activities should reflect the size of the external spillovers from the research.