The Climate Policy Hold‐Up: Green Technologies, Intellectual Property Rights, and the Abatement Incentives of International Agreements

24 Pages Posted: 30 Jun 2017

See all articles by Timo Goeschl

Timo Goeschl

University of Heidelberg - Alfred Weber Institute for Economics

Date Written: July 2017

Abstract

The success of global climate policies over the coming decades depends on the diffusion of “green” technologies. Using a simple model, we highlight a conflict between international environmental agreements (IEAs) on emissions reductions and international systems of intellectual property rights (IPRs) on abatement technologies. When IPRs are strong and global, IEA signatories anticipate rent extraction by innovators. This hold‐up effect reduces abatement, potentially to levels below those of non‐signatories, and it reduces the number of signatories to self‐enforcing IEAs. We explore policy options that respect existing property rights, but avoid the strategic interaction between signatories to an IEA and innovators.

Keywords: Diffusion of innovations, intellectual property rights, international climate policy

JEL Classification: L12, O33, O34, Q54, Q55

Suggested Citation

Goeschl, Timo, The Climate Policy Hold‐Up: Green Technologies, Intellectual Property Rights, and the Abatement Incentives of International Agreements (July 2017). The Scandinavian Journal of Economics, Vol. 119, Issue 3, pp. 709-732, 2017, Available at SSRN: https://ssrn.com/abstract=2995198 or http://dx.doi.org/10.1111/sjoe.12179

Timo Goeschl (Contact Author)

University of Heidelberg - Alfred Weber Institute for Economics ( email )

Bergheimer Str. 20
D-69115 Heidelberg
Germany

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