Technology Diffusion, Abatement Cost, and Transboundary Pollution

Geoffrey Heal and Nori Tarui

No 2008.96, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper studies countries’ incentives to develop advanced pollution abatement technology when technology may spillover across countries and pollution abatement is a global public good. We are motivated in part by the problem of global warming: a solution to this involves providing a global public good, and will surely require the development and implementation of new technologies. We show that at the Nash equilibrium of a simultaneous-move game with R&D investment and emission abatement, whether the free rider effect prevails and under-investment and excess emissions occur depends on the degree of technology spillovers and the effect of R&D on the marginal abatement costs. There are cases in which, contrary to conventional wisdom, Nash equilibrium investments in emissions reductions exceed the first-best case.

Keywords: International Environmental Agreement; Pollution Abatement Costs; Endogenous Technological Change (search for similar items in EconPapers)
JEL-codes: D70 H87 Q50 (search for similar items in EconPapers)
Date: 2008-11
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Technology Diffusion, Abatement Cost, and Transboundary Pollution (2008)
Working Paper: Technology diffusion, abatement cost, and transboundary pollution (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2008.96

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