Economic and Environmental Effectiveness of a Technology-based Climate Protocol

Carlo Carraro () and Barbara Buchner
Additional contact information
Barbara Buchner: Fondazione Eni Enrico Mattei

No 2006_12, Working Papers from Department of Economics, University of Venice "Ca' Foscari"

Abstract: The present stalemate in climate negotiations between the US and the other Annex I countries has led policy analysts and economists to explore the possible emergence of alternative climate regimes that may be applied after 2012. This paper explores the idea of replacing international cooperation on greenhouse gas emission control with international cooperation on climate-related technological innovation and diffusion. This idea � recently proposed among others by Barrett (2001) and Benedick (2001) � is based on the insight that incentives to free ride are much smaller in the case of technological cooperation than in the case of cooperation on emission control. This paper provides a first applied game theory analysis of a technology-based climate protocol by assessing: (i) the selfenforcingness (namely, the absence of incentives to free ride) of the coalition that would form when countries negotiate on climate-related technological cooperation; (ii) the environmental effectiveness of a technology-based climate protocol. The analysis is carried out by using a model in which endogenous and induced technical change are explicitly modelled. The results of our analysis partly support Barrett�s and Benedick�s conjecture. On the one hand, a self-enforcing agreement is more likely to emerge when countries cooperate on environmental technological innovation and diffusion than when they cooperate on emission abatement. However, technological cooperation � without any commitment to emission control � may not lead to a sufficient abatement of greenhouse gas concentrations.

Keywords: Agreements; Climate; Incentives; Negotiations; Policy (search for similar items in EconPapers)
JEL-codes: C72 H23 Q25 Q28 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Economic and environmental effectiveness of a technology-based climate protocol (2004)
Working Paper: Economic and Environmental Effectiveness of a Technology-based Climate Protocol (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ven:wpaper:2006_12

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