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International Energy R&D Spillovers and the Economics of Greenhouse Gas Atmospheric Stabilization

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Author Info
Valentina Bosetti (FEEM)
Carlo Carraro () (Department of Economics, University Of Venice Ca’ Foscari)
Emanuele Massetti (FEEM, FEEM)

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Abstract

This paper explores how international knowledge flows affect the dynamics of the domestic R&D sector and the main economic and environmental variables. The analysis is performed using WITCH, a dynamic regional model of the world economy, in which energy technical change is endogenous. The focus is on disembodied energy R&D international spillovers. The knowledge pool from which regions draw foreign ideas differs between High Income and Low Income countries. Absorption capacity is also endogenous in the model. The basic questions are as follows. Do knowledge spillovers enhance energy technological innovation in different regions of the world? Does the speed of innovation increase? Or do free-riding incentives prevail and international spillovers crowd out domestic R&D efforts? What is the role of domestic absorption capacity and of policies designed to enhance it? The new specification of the WITCH model presented in this paper enables us to answer these questions. Our analysis shows that international knowledge spillovers tend to increase free-riding incentives and decrease the investments in energy R&D. We also analyze the implication of a policy mix in which climate policy is combined with a technology policy designed to enhance absorption capacity in developing countries. Significant positive impacts on the costs of stabilising GHG concentrations are singled out.

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Publisher Info
Paper provided by University of Venice "Ca' Foscari", Department of Economics in its series Working Papers with number 2007_11.

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Length: 27 pages
Date of creation: 2007
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Handle: RePEc:ven:wpaper:2007_11

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Related research
Keywords: Climate Policy; Energy R&D; International R&D Spillovers; Stabilization;

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Find related papers by JEL classification:
H0 - Public Economics - - General
H2 - Public Economics - - Taxation, Subsidies, and Revenue
H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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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. 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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  2. d'Aspremont, Claude & Jacquemin, Alexis, 1988. "Cooperative and Noncooperative R&D in Duopoly with Spillovers," American Economic Review, American Economic Association, vol. 78(5), pages 1133-37, December. [Downloadable!] (restricted)
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  4. repec:att:wimass:199620r is not listed on IDEAS
  5. Valentina Bosetti & Carlo Carraro & Marzio Galeotti & Emanuele Massetti & Massimo Tavoni, 2006. "WITCH. A World Induced Technical Change Hybrid Model," Working Papers 2006_46, University of Venice "Ca' Foscari", Department of Economics. [Downloadable!]
  6. 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)
  7. Kemfert, Claudia, 2005. "Induced technological change in a multi-regional, multi-sectoral, integrated assessment model (WIAGEM): Impact assessment of climate policy strategies," Ecological Economics, Elsevier, vol. 54(2-3), pages 293-305, August. [Downloadable!] (restricted)
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  8. Lanjouw, Jean Olson & Mody, Ashoka, 1996. "Innovation and the international diffusion of environmentally responsive technology," Research Policy, Elsevier, vol. 25(4), pages 549-571, June. [Downloadable!] (restricted)
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  11. Rachel Griffith & Stephen Redding & John Van Reenen, 2003. "R&D and Absorptive Capacity: Theory and Empirical Evidence," Scandinavian Journal of Economics, Blackwell Publishing, vol. 105(1), pages 99-118, 03. [Downloadable!] (restricted)
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  14. Popp, David, 2004. "ENTICE: endogenous technological change in the DICE model of global warming," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 742-768, July. [Downloadable!] (restricted)
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  19. Austan Goolsbee, 1998. "Does Government R&D Policy Mainly Benefit Scientists and Engineers?," NBER Working Papers 6532, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  20. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-94, Supplemen. [Downloadable!] (restricted)
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  23. Eaton, Jonathan & Kortum, Samuel, 1999. "International Technology Diffusion: Theory and Measurement," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 537-70, August.
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  27. Acemoglu, Daron, 2002. "Directed Technical Change," Review of Economic Studies, Blackwell Publishing, vol. 69(4), pages 781-809, October.
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  28. Richard Kneller, 2005. "Frontier Technology, Absorptive Capacity and Distance," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(1), pages 1-23, 02. [Downloadable!] (restricted)
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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. Carlo Carraro & Valentina Bosetti & Emanuele Massetti, 2008. "Banking Permits: Economic Efficiency and Distributional Effects," Working Papers 2008_01, University of Venice "Ca' Foscari", Department of Economics. [Downloadable!]
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  2. Bosetti, Valentina & Carraro, Carlo & Massetti, Emanuele & Tavoni, Massimo, 2007. "Optimal Energy Investment and R&D Strategies to Stabilise Greenhouse Gas Atmospheric Concentrations," CEPR Discussion Papers 6549, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  3. Valentina Bosetti & Carlo Carraro & Massimo Tavoni, 2008. "Delayed Participation of Developing Countries to Climate Agreements: Should Action in the EU and US be Postponed?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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