'The Voracity Effect' and Climate Change: The Impact of Clean Technologies

CentER Discussion Paper Series No. 2009-23

TILEC Discussion Paper No. 2009-014

29 Pages Posted: 6 Apr 2009 Last revised: 8 May 2013

See all articles by Hassan Benchekroun

Hassan Benchekroun

McGill University - Department of Economics

Amrita Ray Chaudhuri

University of Winnipeg - Department of Economics; Tilburg University - Tilburg University School of Economics and Management; Tilburg Law and Economics Center (TILEC)

Multiple version iconThere are 3 versions of this paper

Date Written: September 1, 2010

Abstract

In the absence of a successful international cooperative agreement over the control of emissions there is a growing interest in the role that clean technologies may play to alleviate the climate change problem. Within a non-cooperative transboundary pollution game, we investigate, analytically and within a numerical example based on empirical evidence, the impact of the adoption of a cleaner technology (i.e., a decrease in the emission to output ratio). We show that countries may respond by increasing their emissions resulting in an increase in the stock of pollution that may be detrimental to welfare. This possibility is shown to arise for a significant and empirically relevant range of parameters. It is when the damage and/or the initial stock of pollution are relatively large and when the natural rate of decay of pollution is relatively small that the perverse effect of clean technologies is strongest. Cooperation over the control of emissions is necessary to ensure that the development of cleaner technologies does not exacerbate the free riding behavior that is at the origin of the climate change problem.

Keywords: transboundary pollution, renewable resource, climate change, clean technologies, differential games

JEL Classification: Q20, Q54, Q55, Q58, C73

Suggested Citation

Benchekroun, Hassan and Ray Chaudhuri, Amrita, 'The Voracity Effect' and Climate Change: The Impact of Clean Technologies (September 1, 2010). CentER Discussion Paper Series No. 2009-23, TILEC Discussion Paper No. 2009-014, Available at SSRN: https://ssrn.com/abstract=1373705 or http://dx.doi.org/10.2139/ssrn.1373705

Hassan Benchekroun

McGill University - Department of Economics ( email )

855 Sherbrooke Street West
Montreal, QC H3A 2T7
Canada

Amrita Ray Chaudhuri (Contact Author)

University of Winnipeg - Department of Economics ( email )

Winnipeg, Manitoba R3B 2E9
Canada

Tilburg University - Tilburg University School of Economics and Management ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

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