Endogenous technology and tradable emission quotas

Rolf Golombek and Michael Hoel ()

Resource and Energy Economics, 2008, vol. 30, issue 2, 197-208

Abstract: We study an international climate agreement that assigns emission quotas to each participating country. Unlike the simplest models in the literature, we assume that abatement costs are affected by R&D activities undertaken in all firms in all countries, i.e. abatement technologies are endogenous. In line with the Kyoto agreement we assume that the international climate agreement does not include R&D policies. We show that for a second-best agreement with heterogeneous countries, marginal costs of abatement differ across countries. In other words, the second-best outcome cannot be achieved if emission quotas are tradable.

Date: 2008
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Related works:
Working Paper: Endogenous Technology and Tradable Emission Quotas (2006)
Working Paper: Endogenous Technology and Tradable Emission Quotas (2006)
Working Paper: Endogenous technology and tradable emission quotas (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:30:y:2008:i:2:p:197-208

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