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A full participation agreement on global emission reduction through strategic investments in R&D

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  • Kratzsch, Uwe
  • Sieg, Gernot
  • Stegemann, Ulrike

Abstract

If an emission reduction agreement with participation of all players is not enforceable because politicians are too myopic or not able to commit themselves to sustainable policies or costs of reducing emissions are too high, strategic investments in research and development (R&D) of green technology, for example sustainable drive-trains, can pave the way for a future treaty. Although no player will rationally reduce emissions on its own, investments in R&D by at least one player can change the strategic situation of negotiations to control emissions: Emission abatement costs will decrease so that a treaty with full participation can be achieved in future periods through time consistent sustainable policies. --

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Bibliographic Info

Paper provided by Technische Universität Braunschweig, Economics Department in its series Economics Department Working Paper Series with number 10.

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Date of creation: 2010
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Handle: RePEc:zbw:tbswps:10

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Related research

Keywords: emissions; discount factor; commitment; endogenous technical change; repeated prisoner's dilemma;

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References

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  1. Asheim, Geir B. & Froyn, Camilla Bretteville & Hovi, Jon & Menz, Fredric C., 2006. "Regional versus global cooperation for climate control," Journal of Environmental Economics and Management, Elsevier, vol. 51(1), pages 93-109, January.
  2. Hans-Werner Sinn, 2007. "Public Policies against Global Warming," CESifo Working Paper Series 2087, CESifo Group Munich.
  3. Carraro, Carlo & Siniscalco, Domenico, 1991. "Strategies for the International Protection of the Environment," CEPR Discussion Papers, C.E.P.R. Discussion Papers 568, C.E.P.R. Discussion Papers.
  4. MacLeod, B.W. & Bergin, J., 1991. "Efficiency and Renegotiation in Repeated Games," Cahiers de recherche, Centre interuniversitaire de recherche en économie quantitative, CIREQ 9118, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
  5. Scott Barrett, 2002. "Consensus Treaties," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, Mohr Siebeck, Tübingen, vol. 158(4), pages 529-, December.
  6. Sinn, Hans-Werner, 2008. "Public policies against global warming: A supply side approach," Munich Reprints in Economics, University of Munich, Department of Economics 19638, University of Munich, Department of Economics.
  7. Geir Asheim & Bjart Holtsmark, 2009. "Renegotiation-Proof Climate Agreements with Full Participation: Conditions for Pareto-Efficiency," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 43(4), pages 519-533, August.
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Cited by:
  1. Kratzsch, Uwe & Sieg, Gernot & Stegemann, Ulrike, 2011. "An international agreement with full participation to tackle the stock of greenhouse gases," MPRA Paper 31977, University Library of Munich, Germany.

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