Absorption of Advanced Technologies and the Environment

Hichem Ben M'rad (benmrad.hm@gmail.com)

Strategic Behavior and the Environment, 2015, vol. 5, issue 2, 157-174

Abstract: This paper addresses the strategic behavior of developed and developing countries relative to emissions control within a closed model. Investment in absorptive capacity (AC) and tax on emissions are used to control the abatement efforts. Exogenous research and development (R&D) spillovers move freely from the developed country to the developing country. This allows the developing country to increase its AC. We find that the less developed country invests in AC only when the amount of exogenous spillovers is higher than a critical level. This positive investment in AC increases with respect to the technological level of the more developed country only when the exogenous spillovers are not excessive. Otherwise, the less developed country decreases its investment. We demonstrate that in most cases optimal emissions tax has an inverse relationship with the technological level of the developed country.

Keywords: Endogenous absorptive capacity; R&D; Rransboundary pollution; Abatement cost (search for similar items in EconPapers)
JEL-codes: O32 Q55 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:now:jnlsbe:102.00000059

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