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The Dynamics of Climate Agreements

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  • Bård Harstad

Abstract

This paper analyzes a framework in which countries over time pollute and invest in green technologies. Without a climate treaty, the countries pollute too much and invest too little, particularly if intellectual property rights are weak. Nevertheless, short-term agreements on emission levels then reduce every country's payoff, since countries invest less when they anticipate future negotiations. If intellectual property rights are weak, the agreement should be tougher and more long-term. Conversely, if the climate agreement happens to be short-term or absent, intellectual property rights should be strengthened or technological licensing subsidized.

Suggested Citation

  • Bård Harstad, 2016. "The Dynamics of Climate Agreements," Journal of the European Economic Association, European Economic Association, vol. 14(3), pages 719-752.
  • Handle: RePEc:oup:jeurec:v:14:y:2016:i:3:p:719-752.
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    File URL: http://hdl.handle.net/10.1111/jeea.12138
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    Cited by:

    1. Michael Jakob & Kai Lessmann, 2012. "Signaling in international environmental agreements: the case of early and delayed action," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 12(4), pages 309-325, November.
    2. Bård Harstad, 2018. "Pledge-and-Review Bargaining," CESifo Working Paper Series 7296, CESifo.
    3. Rubio, Santiago J., 2018. "Self-Enforcing International Environmental Agreements: Adaptation and Complementarity," ETA: Economic Theory and Applications 276179, Fondazione Eni Enrico Mattei (FEEM).
    4. Robert Hahn & Robert Ritz, 2014. "Optimal Altruism in Public Good Provision," Cambridge Working Papers in Economics 1403, Faculty of Economics, University of Cambridge.
    5. Pichler, Paul & Sorger, Gerhard, 2018. "Delegating climate policy to a supranational authority: a theoretical assessment," European Economic Review, Elsevier, vol. 101(C), pages 418-440.
    6. Michael Jakob & Gunnar Luderer & Jan Steckel & Massimo Tavoni & Stephanie Monjon, 2012. "Time to act now? Assessing the costs of delaying climate measures and benefits of early action," Climatic Change, Springer, vol. 114(1), pages 79-99, September.
    7. Carsten Helm & Franz Wirl, 2016. "Climate Policies with Private Information: The Case for Unilateral Action," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(4), pages 893-916.
    8. Stefano Carattini & Simon Levin & Alessandro Tavoni, 2019. "Cooperation in the Climate Commons," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 13(2), pages 227-247.
    9. Thomas Norman & Heinrich H. Nax, 2011. "Leading the Way: Coalitional Stability in Technological Cooperation & Sequential Climate Policy," Economics Series Working Papers 585, University of Oxford, Department of Economics.
    10. Christopher Costello & Bruno Nkuiya & Nicolas Querou, 2017. "Extracting spatial resources under possible regime shift," Working Papers hal-01615939, HAL.
    11. 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.
    12. Olivier Bos & Béatrice Roussillon & Paul Schweinzer, 2016. "Agreeing on Efficient Emissions Reduction," Scandinavian Journal of Economics, Wiley Blackwell, vol. 118(4), pages 785-815, October.
    13. Finus, Michael & McGinty, Matthew, 2019. "The anti-paradox of cooperation: Diversity may pay!," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 541-559.
    14. Blasch, Julia & Boogen, Nina & Filippini, Massimo & Kumar, Nilkanth, 2017. "Explaining electricity demand and the role of energy and investment literacy on end-use efficiency of Swiss households," Energy Economics, Elsevier, vol. 68(S1), pages 89-102.
    15. Mason, Charles F. & Polasky, Stephen & Tarui, Nori, 2017. "Cooperation on climate-change mitigation," European Economic Review, Elsevier, vol. 99(C), pages 43-55.
    16. Holtsmark, Katinka & Midttømme, Kristoffer, 2015. "The Dynamics of Linking Permit Markets," Memorandum 02/2015, Oslo University, Department of Economics.
    17. Miguel A. Meléndez-Jiménez & Arnold Polanski, 2018. "Dirty neighbors: Pollution in an interlinked world," Working Papers 2018-06, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
    18. Meléndez-Jiménez, Miguel A. & Polanski, Arnold, 2020. "Dirty neighbors — Pollution in an interlinked world," Energy Economics, Elsevier, vol. 86(C).
    19. Suzi Kerr & Adam Millard-Ball, 2012. "Cooperation To Reduce Developing Country Emissions," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 3(04), pages 1-30.
    20. Hans Gersbach & Quirin Oberpriller & Martin Scheffel, 2019. "Double Free-Riding in Innovation and Abatement: A Rules Treaty Solution," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(2), pages 449-483, June.
    21. May Elsayyad & Florian Morath, 2016. "Technology Transfers For Climate Change," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57, pages 1057-1084, August.

    More about this item

    JEL classification:

    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • 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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