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R&D Cooperation and the Stability of International Environmental Agreements

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Author Info
Carraro, Carlo
Siniscalco, Domenico

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Abstract

International agreements to protect the global environment are typically difficult to reach. In principle they should be profitable for all players involved in the negotiation. Even when they are profitable, however, they are often unstable due to the incentive to free-ride (enjoying the clean environment provided by others' emission reduction without paying the cost). One possible way to overcome this problem is to link the unstable environmental agreement to other agreements which are profitable and stable. This paper presents a model where an environmental negotiation, which is profitable but unstable, is `stabilized' by linking it to an agreement on R&D cooperation, which is shown to be profitable and stable. The optimality of this linkage is also discussed.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1154.

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Date of creation: Apr 1995
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Handle: RePEc:cpr:ceprdp:1154

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Keywords: Coalition Environment Global Warming Innovation Negotiations

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Find related papers by JEL classification:
C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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  1. Claudia Kemfert & Wietze Lise & Richard Tol, 2004. "Games of Climate Change with International Trade," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 28(2), pages 209-232, June. [Downloadable!] (restricted)
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  2. Scott Barret, 1998. "On the Theory and Diplomacy of Environmental Treaty-Making," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 11(3), pages 317-333, April. [Downloadable!] (restricted)
  3. Michael Finus & Bianca Rundshagen, 1998. "Renegotiation–Proof Equilibria in a Global Emission Game When Players Are Impatient," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 12(3), pages 275-306, October. [Downloadable!] (restricted)
  4. Buchner, Barbara & Carraro, Carlo & Cersosimo, Igor & Marchiori, Carmen, 2002. "Back to Kyoto? US Participation and the Linkage Between R&D and Climate Cooperation," CEPR Discussion Papers 3299, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  5. Michael Finus, 2004. "Modesty Pays: Sometimes!," Working Papers 2004.68, Fondazione Eni Enrico Mattei. [Downloadable!]
  6. Spagnolo, G., 1999. "Issue Linkage, Delegation, and International Policy Cooperation," Cambridge Working Papers in Economics 9913, Faculty of Economics, University of Cambridge. [Downloadable!]
  7. Andrew K. Rose & Mark M. Spiegel, 2006. "Non-economic engagement and international exchange: the case of environmental treaties," Working Paper Series 2006-33, Federal Reserve Bank of San Francisco. [Downloadable!]
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