Unilateral emission reductions when there are cross -country technology spillovers

Rolf Golombek and Michael Hoel ()

No 17/2004, Memorandum from Oslo University, Department of Economics

Abstract: With limited participation in an international climate agreement, standard economic analysis suggests that a unilateral action taken by a group of countries in order to reduce its emissions is likely to be undermined by increases in emissions from other countries (carbon leakage). While analyses of carbon leakage typically have regarded the technology in each country as given, abatement technologies are endogenous, and thus technology development may be affected by environmental policies. We demonstrate that with endogenous technologies and technology diffusion between countries, it is no longer obvious that reduced emissions in some countries will increase emissions in other countries. We identify cases in which reduced emissions in some countries might reduce emissions also in other countries.

Keywords: transboundary pollution; unilateral environmental action; R&D expenditures; technology spillovers. (search for similar items in EconPapers)
JEL-codes: O30 Q54 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2004-10-27
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Citations: View citations in EconPapers (2)

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