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Back to Kyoto? US Participation and the Linkage between R&D and Climate Cooperation

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Author Info
Buchner, Barbara
Carraro, Carlo
Cersosimo, Igor
Marchiori, Carmen

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Abstract

The US decision not to ratify the Kyoto Protocol and the recent outcomes of the Bonn and Marrakech Conferences of the Parties drastically reduces the effectiveness of the Kyoto Protocol in controlling GHG emissions. The reason is not only the reduced emission abatement in the US, but also the spillover effects on technology and countries' relative bargaining power induced by the US decision. Therefore, it is crucial to analyse whether an incentive strategy exists that could induce the US to revise their decision and to comply with the Kyoto commitments. One solution, occasionally proposed in the literature and in actual policymaking, is to link negotiations on climate change control with decisions concerning international R&D cooperation. This paper explores this idea by analysing on the one hand the incentives for EU, Japan and Russia to adopt this strategy, and on the other hand the incentives for the US to join a coalition which cooperates both on climate change control and on technological innovation. The extended regime in which cooperation takes place on both dimensions (GHG emissions and R&D) will be examined from the view point of countries' profitability and free-riding incentives. Finally, after having assessed the effectiveness and credibility of the issue linkage strategy, we explore the economic and environmental benefits of a new, recently proposed regime, which aims at achieving GHG emission control by enhancing cooperation on technological innovation and diffusion (without targets on emissions).

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 688.

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Date of creation: 2002
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Handle: RePEc:ces:ceswps:_688

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Related research
Keywords: agreements; climate; incentives; negotiations; policy; technological change;

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Find related papers by JEL classification:
C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
H00 - Public Economics - - General - - - General
H40 - Public Economics - - Publicly Provided Goods - - - General
O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General

References listed on IDEAS
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  1. Goulder, Lawrence H. & Mathai, Koshy, 2000. "Optimal CO2 Abatement in the Presence of Induced Technological Change," Journal of Environmental Economics and Management, Elsevier, vol. 39(1), pages 1-38, January. [Downloadable!] (restricted)
  2. Buonanno, Paolo & Carraro, Carlo & Castelnuovo, Efrem & Galeotti, Marzio, 2000. "Emission Trading Restrictions with Endogenous Technological Change," CEPR Discussion Papers 2514, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  3. Carraro, Carlo & Siniscalco, Domenico, 1995. "R&D Cooperation and the Stability of International Environmental Agreements," CEPR Discussion Papers 1154, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  4. Mohr, Ernst, 1995. "International Environmental Permit Trade and Debt: The Consequences of Country Sovereignty and Cross-Default Policies," Review of International Economics, Blackwell Publishing, vol. 3(1), pages 1-19, February.
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  6. Henk Folmer & Pierre Mouche & Shannon Ragland, 1993. "Interconnected games and international environmental problems," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 3(4), pages 313-335, August. [Downloadable!] (restricted)
  7. Johan Eyckmans & Denise Van Regemorter & Vincent van Steenberghe, 2001. "Is Kyoto fatally flawed? An analysis with MacGEM," Energy, Transport and Environment Working Papers Series ete0118, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment. [Downloadable!]
  8. Carlo Carraro & Carmen Marchiori, 2003. "Endogenous Strategic Issue Linkage in International Negotiations," Working Papers 2003.40, Fondazione Eni Enrico Mattei. [Downloadable!]
  9. Buonanno, Paolo & Carraro, Carlo & Galeotti, Marzio, 2003. "Endogenous induced technical change and the costs of Kyoto," Resource and Energy Economics, Elsevier, vol. 25(1), pages 11-34, February. [Downloadable!] (restricted)
  10. Nordhaus, William D & Yang, Zili, 1996. "A Regional Dynamic General-Equilibrium Model of Alternative Climate-Change Strategies," American Economic Review, American Economic Association, vol. 86(4), pages 741-65, September. [Downloadable!] (restricted)
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  12. Böhringer, Christoph, 2001. "Climate politics from Kyoto to Bonn : from little to nothing?!?," ZEW Discussion Papers 01-49, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  13. Henry Tulkens & Parkash Chander, 1997. "The Core of an Economy with Multilateral Environmental Externalities," International Journal of Game Theory, Springer, vol. 26(3), pages 379-401.
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  14. Carraro, Carlo & Marchiori, Carmen, 2002. "Stable Coalitions," CEPR Discussion Papers 3258, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  15. Chander, Parkash & Tulkens, Henry, 1994. "A Core-Theoretic Solution for the Design of Cooperative Agreements on Transfrontier Pollution," Working Papers 897, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
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  16. Buchner, Barbara & Carraro, Carlo & Cersosimo, Igor, 2002. "On the Consequences of the US Withdrawal from the Kyoto/Bonn Protocol," CEPR Discussion Papers 3239, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  17. Carraro, Carlo & Siniscalco, Domenico, 1993. "Strategies for the international protection of the environment," Journal of Public Economics, Elsevier, vol. 52(3), pages 309-328, October. [Downloadable!] (restricted)
    Other versions:
  18. Sebenius, James K., 1983. "Negotiation arithmetic: adding and subtracting issues and parties," International Organization, Cambridge University Press, vol. 37(02), pages 281-316, March. [Downloadable!]
  19. Tollison, Robert D. & Willett, Thomas D., 1979. "An economic theory of mutually advantageous issue linkages in international negotiations," International Organization, Cambridge University Press, vol. 33(04), pages 425-449, September. [Downloadable!]
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  21. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
    Other versions:
  22. Marzio Galeotti & Alessandro Lanza, . "Desperately Seeking (Environmental) Kuznets," Working Papers 1999.2, Fondazione Eni Enrico Mattei. [Downloadable!]
    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Valentina Bosetti & Carlo Carraro & Emanuele Massetti & Massimo Tavoni, 2007. "International Energy R&D Spillovers and the Economics of Greenhouse Gas Atmospheric Stabilization," Working Papers 2007.82, Fondazione Eni Enrico Mattei. [Downloadable!]
    Other versions:
  2. Carlo Carraro & Barbara Buchner, 2006. "Economic and Environmental Effectiveness of a Technology-based Climate Protocol," Working Papers 2006_12Classification-JEL, University of Venice "Ca' Foscari", Department of Economics. [Downloadable!]
    Other versions:
  3. Johan Eyckmans & Michael Finus, 2003. "New Roads to International Environmental Agreements: The Case of Global Warming," Energy, Transport and Environment Working Papers Series ete0318, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment. [Downloadable!]
    Other versions:
  4. Carlo Carraro & Barbara Buchner, 2006. "Regional and sub-global climate blocs. A game-theoretic perspective on bottom-up climate regimes," Working Papers 2006_10, University of Venice "Ca' Foscari", Department of Economics. [Downloadable!]
    Other versions:
  5. Geoffrey Heal & Nori Tarui, 2008. "Technology diffusion, abatement cost, and transboundary pollution," Working Papers 200803, University of Hawaii at Manoa, Department of Economics. [Downloadable!]
    Other versions:
  6. Richard S.J. Tol, 2002. "Technology Protocols For Climate Change: An Application Of Fund," Working Papers FNU-14, Research unit Sustainability and Global Change, Hamburg University, revised Sep 2002. [Downloadable!]
  7. Michael Finus & Ekko van Ierland, 2003. "Stability of Climate Coalitions in a Cartel Formation Game," Working Papers 2003.61, Fondazione Eni Enrico Mattei. [Downloadable!]
    Other versions:
  8. Carlo Carraro & Barbara Buchner, 2003. "China and the Evolution of the Present Climate Regime," Working Papers 2003.103, Fondazione Eni Enrico Mattei. [Downloadable!]
  9. Valentina Bosetti & Carlo Carraro & Enrica De Cian & Romain Duval & Emanuele Massetti & Massimo Tavoni, 2009. "The Incentives to Participate in, and the Stability of, International Climate Coalitions: A Game-theoretic Analysis Using the Witch Model," Working Papers 2009.64, Fondazione Eni Enrico Mattei. [Downloadable!]
  10. Carlo Carraro & Barbara Buchner, 2006. "US, China and the economics of climate negotiations," Working Papers 2006_07, University of Venice "Ca' Foscari", Department of Economics. [Downloadable!]
    Other versions:
  11. Laurent Drouet & Alain Haurie & Francesco Moresino & Jean-Philippe Vial & Marc Vielle & Laurent Viguier, 2008. "An oracle based method to compute a coupled equilibrium in a model of international climate policy," Computational Management Science, Springer, vol. 5(1), pages 119-140, February. [Downloadable!] (restricted)
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