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'The Voracity Effect' and Climate Change: The Impact of Clean Technologies

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  • Benchekroun, H.
  • Ray Chaudhuri, A.

    (Tilburg University, Center for Economic Research)

Abstract

In the absence of a successful international cooperative agreement over the control of emissions there is a growing interest in the role that clean technologies may play to alleviate the climate change problem. Within a non-cooperative transboundary pollution game, we investigate, analytically and within a numerical example based on empirical evidence, the impact of the adoption of a cleaner technology (i.e., a decrease in the emission to output ratio). We show that countries may respond by increasing their emissions resulting in an increase in the stock of pollution that may be detrimental to welfare. This possibility is shown to arise for a signi cant and empirically relevant range of parameters. It is when the damage and/or the initial stock of pollution are relatively large and when the natural rate of decay of pollution is relatively small that the perverse e¤ect of clean technologies is strongest. Cooperation over the control of emissions is necessary to ensure that the development of cleaner technologies does not exacerbate the free riding behavior that is at the origin of the climate change problem.

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Bibliographic Info

Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2010-97.

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Date of creation: 2010
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Handle: RePEc:dgr:kubcen:201097

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Web page: http://center.uvt.nl

Related research

Keywords: transboundary pollution; renewable resource; climate change; clean technolo- gies; differential games;

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References

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  1. Dockner,Engelbert J. & Jorgensen,Steffen & Long,Ngo Van & Sorger,Gerhard, 2000. "Differential Games in Economics and Management Science," Cambridge Books, Cambridge University Press, number 9780521637329, October.
  2. Rubio, Santiago J. & Casino, Begona, 2002. "A note on cooperative versus non-cooperative strategies in international pollution control," Resource and Energy Economics, Elsevier, vol. 24(3), pages 251-261, June.
  3. Ngo Long & Gerhard Sorger, 2006. "Insecure property rights and growth: the role of appropriation costs, wealth effects, and heterogeneity," Economic Theory, Springer, vol. 28(3), pages 513-529, 08.
  4. Jorgensen, Steffen & Zaccour, Georges, 2001. "Time consistent side payments in a dynamic game of downstream pollution," Journal of Economic Dynamics and Control, Elsevier, vol. 25(12), pages 1973-1987, December.
  5. Dockner Engelbert J. & Van Long Ngo, 1993. "International Pollution Control: Cooperative versus Noncooperative Strategies," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 13-29, July.
  6. Scott Barrett, 2006. "Climate Treaties and "Breakthrough" Technologies," American Economic Review, American Economic Association, vol. 96(2), pages 22-25, May.
  7. Philip R. Lane & Aaron Tornell, 1999. "The Voracity Effect," American Economic Review, American Economic Association, vol. 89(1), pages 22-46, March.
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Cited by:
  1. Benchekroun, H. & Ray Chaudhuri, A., 2012. "Cleaner Technologies and the Stability of International Environmental Agreements," Discussion Paper 2012-021, Tilburg University, Tilburg Law and Economic Center.

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