Abstract

http://ssrn.com/abstract=1138539
 
 

References (38)



 
 

Citations (25)



 


 



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


Valentina Bosetti


Fondazione Eni Enrico Mattei (FEEM); Bocconi University; CMCC - Euro Mediterranean Centre for Climate Change

Carlo Carraro


Fondazione Eni Enrico Mattei (FEEM); Ca Foscari University of Venice - Department of Economics; Centre for Economic Policy Research (CEPR); CMCC - Euro Mediterranean Centre for Climate Change (Climate Policy Division); IPCC Working Group III

Emanuele Massetti


Fondazione Eni Enrico Mattei (FEEM) & Euro-Mediterranean Center for Climate Change; CMCC - Euro Mediterranean Centre for Climate Change

Massimo Tavoni


Fondazione Eni Enrico Mattei (FEEM); Princeton University - Princeton Environmental Institute

August 2007

CEPR Discussion Paper No. DP6426

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 knowledge pool from which regions draw foreign ideas differs between High Income and Low Income countries. Absorption capacity is also endogenous in the model. 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? What is the role of domestic absorption capacity and of policies designed to enhance it? Do greenhouse gas stabilization costs drop in the presence of international technological spillovers? The new specification of the WITCH model presented in this paper enables us to answer these questions. 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. International spillovers, however, are also an important policy channel. We therefore 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 singled out. Finally, a sensitivity analysis shows that High Income countries are more responsive than Low Income countries to changes in the parameters and thus suggests to focus additional empirical research efforts on the former.

Number of Pages in PDF File: 29

Keywords: Climate policy, Energy R&D, GHG stabilisation, International R&D Spillovers

JEL Classification: H0, H1, H2

working papers series


Date posted: May 30, 2008  

Suggested Citation

Bosetti, Valentina and Carraro, Carlo and Massetti, Emanuele and Tavoni, Massimo, International Energy R&D Spillovers and the Economics of Greenhouse Gas Atmospheric Stabilization (August 2007). , Vol. , pp. -, 2007. Available at SSRN: http://ssrn.com/abstract=1138539

Contact Information

Valentina Bosetti (Contact Author)
Fondazione Eni Enrico Mattei (FEEM) ( email )
C.so Magenta 63
Milano, 20123
Italy
Bocconi University ( email )
Via Gobbi 5
Milan, 20136
Italy
CMCC - Euro Mediterranean Centre for Climate Change
Viale Gallipoli, 49
Lecce, 73100
Italy
Carlo Carraro
Fondazione Eni Enrico Mattei (FEEM) ( email )
Campo S. M. Formosa, Castello 5252
Venezia, 30122
Italy
+39 04 1271 1453 (Phone)
+39 04 1271 1461 (Fax)
Ca Foscari University of Venice - Department of Economics ( email )
Cannaregio 873
Venice, 30121
Italy
+39 04 1234 9166 (Phone)
+39 04 1234 9176 (Fax)
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
CMCC - Euro Mediterranean Centre for Climate Change (Climate Policy Division)
73100 Lecce
Italy
Intergovernmental Panel on Climate Change (IPCC)
A. van Leeuwenhoeklaan 9
P.O. Box 1
BA Bilthoven 3720
Netherlands
+31 30 274 4281 (Phone)
+31 30 274 4464 (Fax)
Emanuele Massetti
Fondazione Eni Enrico Mattei (FEEM) & Euro-Mediterranean Center for Climate Change ( email )
Corso Magenta 63
20123 Milan
Italy
CMCC - Euro Mediterranean Centre for Climate Change
Viale Gallipoli, 49
Lecce, 73100
Italy
Massimo Tavoni
Fondazione Eni Enrico Mattei (FEEM) ( email )
Corso Magenta 63
20123 Milan
Italy
Princeton University - Princeton Environmental Institute
22 Chambers Street
Princeton, NJ 08544
United States

Feedback to SSRN


Paper statistics
Abstract Views: 352
Downloads: 4
References:  38
Citations:  25

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo2 in 0.562 seconds