IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Can China Harness Globalization to Reap Carbon Savings? Modeling International Technology Diffusion in a Multi-region Framework

  • Wei Jin
Registered author(s):

    This paper examines the effect of globalization, particularly international technology diffusion (TD), on China's domestic carbon savings. Building on a multi-region numerical model, this study considers both indigenous R&D and foreign TD as two sources of endogenous TC for domestic carbon savings. The model systematically describes foreign TD through three diffusion channels of trade, foreign direct investment (FDI) and disembodied spillovers, with an elaborate treatment on local knowledge absorptive capacity. Simulation results show that: (1) Foreign TD complements China's indigenous R&D to help reduce domestic carbon emissions, with the leading diffusion channel being disembodied spillovers in the short run and embodied diffusion (via import and FDI) in the long run; (2) Trade and FDI liberalization (economic globalization) facilitates economic integration and production growth, yet at the cost of higher emissions levels without carbon savings (scale effect); (3) Removal of foreign TD barriers (knowledge globalization) acquires the benefits of domestic carbon savings (technique effect); (4) Domestic climate regulation create the composition effect by inducing indigenous R&D and foreign TD to shift economic composition, hence helping partially mitigate climate compliance cost.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://cama.crawford.anu.edu.au/pdf/working-papers/2012/522012.pdf
    Download Restriction: no

    Paper provided by Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University in its series CAMA Working Papers with number 2012-52.

    as
    in new window

    Length: 51 pages
    Date of creation: Dec 2012
    Date of revision:
    Handle: RePEc:een:camaaa:2012-52
    Contact details of provider: Postal: Crawford Building, Lennox Crossing, Building #132, Canberra ACT 2601
    Phone: +61 2 6125 4705
    Fax: +61 2 6125 5448
    Web page: http://cama.crawford.anu.edu.au
    Email:


    More information through EDIRC

    References listed on IDEAS
    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.:

    as in new window
    1. Gillingham, Kenneth & Newell, Richard G. & Pizer, William A., 2008. "Modeling endogenous technological change for climate policy analysis," Energy Economics, Elsevier, vol. 30(6), pages 2734-2753, November.
    2. Beata Smarzynska Javorcik, 2004. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages," American Economic Review, American Economic Association, vol. 94(3), pages 605-627, June.
    3. Rivera-Batiz, Luis A & Romer, Paul M, 1991. "Economic Integration and Endogenous Growth," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 531-55, May.
    4. Magnus Blomstrom & Ari Kokko, 2003. "The Economics of Foreign Direct Investment Incentives," NBER Working Papers 9489, National Bureau of Economic Research, Inc.
    5. Acharya, Ram C. & Keller, Wolfgang, 2007. "Technology Transfer through Imports," CEPR Discussion Papers 6296, C.E.P.R. Discussion Papers.
    6. Jonathan E. Haskel & Sonia C. Pereira & Matthew J. Slaughter, 2007. "Does Inward Foreign Direct Investment Boost the Productivity of Domestic Firms?," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 482-496, August.
    7. Brian R. Copeland & M. Scott Taylor, 2004. "Trade, Growth, and the Environment," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 7-71, March.
    8. Valentina Bosetti & Carlo Carraro & Romain Duval & Massimo Tavoni, 2010. "What Should We Expect from Innovation? A Model-Based Assessment of the Environmental and Mitigation Cost Implications of Climate-Related R&D," Working Papers 2010.42, Fondazione Eni Enrico Mattei.
    9. Mary Amiti & Jozef Konings, 2005. "Trade Liberalization, Intermediate Inputs, and Productivity; Evidence From Indonesia," IMF Working Papers 05/146, International Monetary Fund.
    10. Acemoglu, Daron & Aghion, Philippe & Bursztyn, Leonardo & Hemous, David, 2011. "The Environment and Directed Technical Change," CEPR Discussion Papers 8660, C.E.P.R. Discussion Papers.
    11. David Popp, 2011. "International Technology Transfer, Climate Change, and the Clean Development Mechanism," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 5(1), pages 131-152, Winter.
    12. Rachel Griffith & Stephen Redding & John Van Reenen, 2000. "Mapping the two faces of R&D: productivity growth in a panel of OECD industries," IFS Working Papers W00/02, Institute for Fiscal Studies.
    13. Lin, Ping & Saggi, Kamal, 2005. "Multinational firms, exclusivity, and the degree of backward linkages," Discussion Paper Series 1: Economic Studies 2005,10, Deutsche Bundesbank, Research Centre.
    14. Lee, Gwanghoon, 2006. "The effectiveness of international knowledge spillover channels," European Economic Review, Elsevier, vol. 50(8), pages 2075-2088, November.
    15. Richard G. Newell & Adam B. Jaffe & Robert N. Stavins, 1999. "The Induced Innovation Hypothesis And Energy-Saving Technological Change," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 941-975, August.
    16. Stephen R. Yeaple & Wolfgang Keller, 2003. "Multinational Enterprises, International Trade, and Productivity Growth; Firm-Level Evidence From the United States," IMF Working Papers 03/248, International Monetary Fund.
    17. Reyer Gerlagh & Onno Kuik, 2007. "Carbon Leakage with International Technology Spillovers," Working Papers 2007.33, Fondazione Eni Enrico Mattei.
    18. Cole, Matthew A. & Elliott, Robert J. R., 2003. "Determining the trade-environment composition effect: the role of capital, labor and environmental regulations," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 363-383, November.
    19. Matthieu Glachant & Antoine Dechezleprêtre & Yann Ménière, 2007. "The Clean Development Mechanism and the International Diffusion of Technologies: An Empirical Study," Working Papers 2007.105, Fondazione Eni Enrico Mattei.
    20. W. Jill Harrison & K.R. Pearson, 1994. "Computing Solutions for Large General Equilibrium Models Using GEMPACK," Centre of Policy Studies/IMPACT Centre Working Papers ip-64, Victoria University, Centre of Policy Studies/IMPACT Centre.
    21. Jonathan Eaton & Samuel Kortum, 2001. "Trade in Capital Goods," NBER Working Papers 8070, National Bureau of Economic Research, Inc.
    22. Adam B. Jaffe & Manuel Trajtenberg, 1998. "International Knowledge Flows: Evidence from Patent Citations," NBER Working Papers 6507, National Bureau of Economic Research, Inc.
    23. Robert N. Stavins, 2010. "The Problem of the Commons: Still Unsettled after 100 Years," Working Papers 2010.131, Fondazione Eni Enrico Mattei.
    24. Susanto Basu & David N. Weil, 1998. "Appropriate Technology And Growth," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1025-1054, November.
    25. Jonathan Eaton & Samuel Kortum, 2002. "Technology, Geography, and Trade," Econometrica, Econometric Society, vol. 70(5), pages 1741-1779, September.
    26. Goulder, Lawrence H. & Schneider, Stephen H., 1999. "Induced technological change and the attractiveness of CO2 abatement policies," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 211-253, August.
    27. Bosetti, Valentina & Carraro, Carlo & Massetti, Emanuele & Tavoni, Massimo, 2007. "International Energy R&D Spillovers and the Economics of Greenhouse Gas Atmospheric Stabilization," CEPR Discussion Papers 6426, C.E.P.R. Discussion Papers.
    28. Jeffrey A. Frankel, 2003. "The Environment and Globalization," NBER Working Papers 10090, National Bureau of Economic Research, Inc.
    29. Löschel, Andreas & Otto, Vincent M., 2009. "Technological uncertainty and cost effectiveness of CO2 emission reduction," Energy Economics, Elsevier, vol. 31(Supplemen), pages S4-S17.
    30. Paul Romer, 1989. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
    31. Atkinson, Anthony B & Stiglitz, Joseph E, 1969. "A New View of Technological Change," Economic Journal, Royal Economic Society, vol. 79(315), pages 573-78, September.
    32. Acemoglu, Daron, 2002. "Directed Technical Change," Review of Economic Studies, Wiley Blackwell, vol. 69(4), pages 781-809, October.
    33. Wendner, Ronald, 1999. "A Calibration Procedure of Dynamic CGE Models for Non-steady State Situations Using GEMPACK," Computational Economics, Society for Computational Economics, vol. 13(3), pages 265-87, June.
    34. van Meijl, Hans & Frank van Tongeren, 1999. "Endogenous International Technology Spillovers and Biased Technical Change in the GTAP Model," GTAP Technical Papers 318, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    35. Wolfgang Keller, 2001. "International Technology Diffusion," NBER Working Papers 8573, National Bureau of Economic Research, Inc.
    36. Haddad, Mona & Harrison, Ann, 1993. "Are there positive spillovers from direct foreign investment? : Evidence from panel data for Morocco," Journal of Development Economics, Elsevier, vol. 42(1), pages 51-74, October.
    37. Jorgenson, Dale W. & Wilcoxen, Peter J., 1990. "Intertemporal general equilibrium modeling of U.S. environmental regulation," Journal of Policy Modeling, Elsevier, vol. 12(4), pages 715-744.
    38. Hugo ROJAS-ROMAGOSA & Arjan LEJOUR & Gerard VERWEIJ, . "Opening Services Markets within Europe: Modelling Foreign Establishments in a CGE Framework," EcoMod2008 23800117, EcoMod.
    39. Popp, David & Hascic, Ivan & Medhi, Neelakshi, 2011. "Technology and the diffusion of renewable energy," Energy Economics, Elsevier, vol. 33(4), pages 648-662, July.
    40. Popp, David, 2006. "Innovation in climate policy models: Implementing lessons from the economics of R&D," Energy Economics, Elsevier, vol. 28(5-6), pages 596-609, November.
    41. Bovenberg, A.L. & Goulder, L.H., 1996. "Optimal environmental taxation in the presence of other taxes : General equilibrium analyses," Other publications TiSEM 5d4b7517-c5c8-4ef6-ab76-3, Tilburg University, School of Economics and Management.
    42. Blalock, Garrick & Gertler, Paul J., 2008. "Welfare gains from Foreign Direct Investment through technology transfer to local suppliers," Journal of International Economics, Elsevier, vol. 74(2), pages 402-421, March.
    43. Mark Horridge & Ken Pearson, 2011. "Solution Software for CGE Modeling," Centre of Policy Studies/IMPACT Centre Working Papers g-214, Victoria University, Centre of Policy Studies/IMPACT Centre.
    44. Downing, Paul B. & White, Lawrence J., 1986. "Innovation in pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 13(1), pages 18-29, March.
    45. Dixon, Peter B. & Pearson, K.R. & Picton, Mark R. & Rimmer, Maureen T., 2005. "Rational expectations for large CGE models: A practical algorithm and a policy application," Economic Modelling, Elsevier, vol. 22(6), pages 1001-1019, December.
    46. Madsen, Jakob B., 2007. "Technology spillover through trade and TFP convergence: 135 years of evidence for the OECD countries," Journal of International Economics, Elsevier, vol. 72(2), pages 464-480, July.
    47. Tobin, James, 1969. "A General Equilibrium Approach to Monetary Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 1(1), pages 15-29, February.
    48. Bovenberg, A Lans & Goulder, Lawrence H, 1996. "Optimal Environmental Taxation in the Presence of Other Taxes: General-Equilibrium Analyses," American Economic Review, American Economic Association, vol. 86(4), pages 985-1000, September.
    49. Marian Leimbach & Klaus Eisenack, 2009. "A Trade Algorithm for Multi-Region Models Subject to Spillover Externalities," Computational Economics, Society for Computational Economics, vol. 33(2), pages 107-130, March.
    50. Lovely, Mary & Popp, David, 2011. "Trade, technology, and the environment: Does access to technology promote environmental regulation?," Journal of Environmental Economics and Management, Elsevier, vol. 61(1), pages 16-35, January.
    51. Nick Johnstone & Ivan Hascic & David Popp, 2008. "Renewable Energy Policies And Technological Innovation: Evidence Based On Patent Counts," NBER Working Papers 13760, National Bureau of Economic Research, Inc.
    52. Leimbach, Marian & Edenhofer, Ottmar, 2007. "Technological spillovers within multi-region models: Intertemporal optimization beyond the Negishi approach," Economic Modelling, Elsevier, vol. 24(2), pages 272-294, March.
    53. James R. Markusen, 2004. "Multinational Firms and the Theory of International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633078, June.
    54. Sue Wing, Ian, 2006. "Representing induced technological change in models for climate policy analysis," Energy Economics, Elsevier, vol. 28(5-6), pages 539-562, November.
    55. Keller, Wolfgang, 1996. "Absorptive capacity: On the creation and acquisition of technology in development," Journal of Development Economics, Elsevier, vol. 49(1), pages 199-227, April.
    56. 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.
    57. Lawrence H. Summers, 1981. "Taxation and Corporate Investment: A q-Theory Approach," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 12(1), pages 67-140.
    58. Ann E. Harrison & Brian J. Aitken, 1999. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," American Economic Review, American Economic Association, vol. 89(3), pages 605-618, June.
    59. Hauknes, Johan & Knell, Mark, 2009. "Embodied knowledge and sectoral linkages: An input-output approach to the interaction of high- and low-tech industries," Research Policy, Elsevier, vol. 38(3), pages 459-469, April.
    60. 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.
    61. Jin, Wei, 2012. "Can technological innovation help China take on its climate responsibility? An intertemporal general equilibrium analysis," Energy Policy, Elsevier, vol. 49(C), pages 629-641.
    62. 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.
    63. David Popp, 2002. "Induced Innovation and Energy Prices," American Economic Review, American Economic Association, vol. 92(1), pages 160-180, March.
    64. Rodriguez-Clare, Andres, 1996. "Multinationals, Linkages, and Economic Development," American Economic Review, American Economic Association, vol. 86(4), pages 852-73, September.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:een:camaaa:2012-52. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Cama Admin)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.