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Sharing R&D investments in cleaner technologies to mitigate climate change

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  • El-Sayed, Abeer
  • Rubio, Santiago J.

Abstract

This paper examines international cooperation on technological development as an alternative to international cooperation on GHG emission reductions. It is assumed that when countries cooperate they coordinate their investments so as to minimize the agreement costs of controlling emissions. Further it is assumed that in such cases they also pool their R&D efforts so as to fully internalize the spillover effects of their investments in R&D. In order to analyze the scope of cooperation, an agreement formation game is solved in three stages. First, countries decide whether or not to sign the agreement. Then, in the second stage, signatories (playing together) and non-signatories (playing individually) select their investment in R&D. Finally, in the third stage, each country decides on its level of emissions non-cooperatively. For linear environmental damages and quadratic investment costs, our findings show that the maximum participation in a R&D agreement consists of six countries and that participation decreases as spillover effects increase until a minimum participation consisting of three countries is reached.

Suggested Citation

  • El-Sayed, Abeer & Rubio, Santiago J., 2014. "Sharing R&D investments in cleaner technologies to mitigate climate change," Resource and Energy Economics, Elsevier, vol. 38(C), pages 168-180.
  • Handle: RePEc:eee:resene:v:38:y:2014:i:c:p:168-180
    DOI: 10.1016/j.reseneeco.2014.07.003
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    Cited by:

    1. repec:eee:resene:v:49:y:2017:i:c:p:201-217 is not listed on IDEAS
    2. Lambertini, Luca & Poyago-Theotoky, Joanna & Tampieri, Alessandro, 2017. "Cournot competition and “green” innovation: An inverted-U relationship," Energy Economics, Elsevier, vol. 68(C), pages 116-123.
    3. repec:kap:itaxpf:v:24:y:2017:i:4:d:10.1007_s10797-017-9463-2 is not listed on IDEAS
    4. Basak Bayramoglu & Michael Finus & Jean-François Jacques, 2016. "Climate Agreements in a Mitigation-Adaptation Game," Working Papers 2016.17, FAERE - French Association of Environmental and Resource Economists.
    5. Emilson C. D. Silva, 2017. "Self-enforcing agreements under unequal nationally determined contributions," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(4), pages 705-729, August.
    6. Michael Hübler, 2015. "A theory-based discussion of international technology funding," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 17(2), pages 313-327, April.
    7. Hans Gersbach & Marie-Catherine Riekhof, 2017. "Technology Treaties and Climate Change," CER-ETH Economics working paper series 17/268, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    8. Ouchida, Yasunori & Goto, Daisaku, 2016. "Environmental research joint ventures and time-consistent emission tax: Endogenous choice of R&D formation," Economic Modelling, Elsevier, vol. 55(C), pages 179-188.
    9. Julia Blasch & Nina Boogen & Nilkanth Kumar & Massimo Filippini, 2017. "The role of energy and investment literacy for residential electricity demand and end-use efficiency," CER-ETH Economics working paper series 17/269, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.

    More about this item

    Keywords

    International environmental agreements; R&D investment; Technology spillovers;

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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