Technology Agreements with Heterogeneous Countries

36 Pages Posted: 13 Feb 2013

See all articles by Michael Hoel

Michael Hoel

University of Oslo; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Aart de Zeeuw

Tilburg University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: January 7, 2013

Abstract

For sufficiently low abatement costs many countries might undertake significant emission reductions even without any international agreement on emission reductions. We consider a situation where a coalition of countries does not cooperate on emission reductions but cooperates on the development of new, climate friendly technologies that reduce the costs of abatement. The equilibrium size of such a coalition, as well as equilibrium emissions, depends on the distribution across countries of their willingness to pay for emission reductions. Increased willingness to pay for emissions reductions for any group of countries will reduce (or leave unchanged) the equilibrium coalition size. However, the effect of such an increase in aggregate willingness to pay on equilibrium emissions is ambiguous.

Keywords: Technology Agreement, Coalition Stability, Climate, International Agreement

JEL Classification: F42, O32, Q2, C72

Suggested Citation

Hoel, Michael and de Zeeuw, Aart J., Technology Agreements with Heterogeneous Countries (January 7, 2013). FEEM Working Paper No. 7.2013, Available at SSRN: https://ssrn.com/abstract=2214811 or http://dx.doi.org/10.2139/ssrn.2214811

Michael Hoel (Contact Author)

University of Oslo ( email )

P.O. Box 1095 Blindern
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CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

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Germany

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Aart J. De Zeeuw

Tilburg University - Department of Economics ( email )

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Tilburg, 5000 LE
Netherlands
+31 13 466 2065 (Phone)
+31-13-466-3042 (Fax)

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