International Energy R&D Spillovers and the Economics of Greenhouse Gas Atmospheric Stabilization

Valentina Bosetti, Carlo Carraro (), Emanuele Massetti and Massimo Tavoni ()

No 2151, CESifo Working Paper Series from CESifo

Abstract: It is widely recognized that technological change has the potential to reduce GHG emissions without compromising economic growth; hence, any better understanding of the process of technological innovation is likely to increase our knowledge of mitigation possibilities and costs. This paper explores how international knowledge flows affect the dynamics of the domestic R&D sector and the main economic and environmental variables. The analysis is performed using WITCH, a dynamic regional model of the world economy, in which energy technical change is endogenous. The focus is on disembodied energy R&D international spillovers.The basic questions are as follows. Do knowledge spillovers enhance energy technological innovation in different regions of the world? Does the speed of innovation increase? Or do free-riding incentives prevail and international spillovers crowd out domestic R&D efforts? Our analysis shows that international knowledge spillovers tend to increase free-riding incentives and decrease the investments in energy R&D. The strongest cuts in energy R&D investments are recorded among High Income countries, where international knowledge flows crowd out domestic R&D efforts. The overall domestic pool of knowledge, and thus total net GHG stabilization costs, remain largely unaffected. We also analyze the implication of a policy mix in which climate policy is combined with a technology policy designed to enhance absorption capacity in developing countries. Significant positive impacts on the costs of stabilising GHG concentrations are then singled out.

Keywords: climate policy; energy R&D; international R&D spillovers; stabilization (search for similar items in EconPapers)
JEL-codes: H40 O30 Q40 (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: International energy R&D spillovers and the economics of greenhouse gas atmospheric stabilization (2008)
Working Paper: International Energy R&D Spillovers and the Economics of Greenhouse Gas Atmospheric Stabilization (2007)
Working Paper: International Energy R&D Spillovers and the Economics of Greenhouse Gas Atmospheric Stabilization (2007)
Working Paper: International Energy R&D Spillovers and the Economics of Greenhouse Gas Atmospheric Stabilization (2007)
Working Paper: International Energy R&D Spillovers and the Economics of Greenhouse Gas Atmospheric Stabilization (2007)
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