Technology Treaties and Climate Change
CER-ETH – Center of Economic Research at ETH Zurich, Working Paper 17/268, March 2017
79 Pages Posted: 11 Mar 2017 Last revised: 25 Mar 2017
Date Written: March 10, 2017
We introduce an international technology treaty that couples the funding of research for a more advanced abatement technology with an international emissions permit market. Under the treaty, each country decides on the amount of permits for its domestic industries, but a fraction of these permits is auctioned on the permit market, and the revenues are used to scale up license revenues for the innovators of abatement technologies. We discuss the conditions under which such a technology treaty can slow down climate change through technological innovations and whether it creates complementary incentives for countries to tighten permit issuance. Finally, we discuss how participation in Tech Treaties can be fostered and how such treaties might be implemented.
Keywords: Climate change mitigation, Technology promotion, International permit markets, International treaty, Externalities
JEL Classification: H23, Q54, O31
Suggested Citation: Suggested Citation