The Climate Policy Hold‐Up: Green Technologies, Intellectual Property Rights, and the Abatement Incentives of International Agreements

Timo Goeschl and Grischa Perino

Scandinavian Journal of Economics, 2017, vol. 119, issue 3, 709-732

Abstract: The success of global climate policies over the coming decades depends on the diffusion of “green” technologies. Using a simple model, we highlight a conflict between international environmental agreements (IEAs) on emissions reductions and international systems of intellectual property rights (IPRs) on abatement technologies. When IPRs are strong and global, IEA signatories anticipate rent extraction by innovators. This hold‐up effect reduces abatement, potentially to levels below those of non‐signatories, and it reduces the number of signatories to self‐enforcing IEAs. We explore policy options that respect existing property rights, but avoid the strategic interaction between signatories to an IEA and innovators.

Date: 2017
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https://doi.org/10.1111/sjoe.12179

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Working Paper: The Climate Policy Hold-Up: Green Technologies,Intellectual Property Rights, and the Abatement Incentives of International Agreements (2015)
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