Economic and Environmental Effectiveness of a Technology-Based Protocol

29 Pages Posted: 6 Jul 2004

See all articles by Carlo Carraro

Carlo Carraro

Fondazione Eni Enrico Mattei (FEEM); Ca' Foscari University of Venice; CMCC - Euro Mediterranean Centre for Climate Change (Climate Policy Division); IPCC; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Centre for European Policy Studies, Brussels; Green Growth Knowledge Platform; International Center for Climate Governance

Barbara K. Buchner

International Energy Agency; Fondazione Eni Enrico Mattei (FEEM)

Date Written: June 2004

Abstract

This Paper provides a first applied game theory analysis of a technology-based climate protocol by assessing: (i) the self-enforcement (namely, the absence of incentives to free ride) of the coalition that would form when countries negotiate on climate-related technological cooperation; (ii) the environmental effectiveness of a technology-based climate protocol. The analysis is carried out using a model in which endogenous and induced technical changes are explicitly modelled and in which international technological spillovers are also quantified. The results of our analysis partly support Barrett's and Benedick's conjecture. On the one hand, a self-enforcing agreement is more likely to emerge when countries cooperate on environmental technological innovation and diffusion than when they cooperate on emission abatement. Technological cooperation - without any commitment to emission control - may not lead to a sufficient abatement of greenhouse gas concentrations, however.

Keywords: Agreements, climate, incentives, technological change, policy

JEL Classification: C70, H00, H40, O30

Suggested Citation

Carraro, Carlo and Buchner, Barbara K., Economic and Environmental Effectiveness of a Technology-Based Protocol (June 2004). Available at SSRN: https://ssrn.com/abstract=562044

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