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On the Timing of Climate Agreements

Author

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  • Robert C. Schmidt
  • Roland Strausz
  • Melanie

Abstract

A central issue in climate policy is the question whether long-term targets for green- house gas emissions should be adopted. This paper analyzes strategic effects related to the timing of such commitments. Using a two-country model, we identify a redistributive effect that undermines long-term cooperation when countries are asymmetric and side payments are unavailable. The effect enables countries to shift rents strategically via their R&D efforts under delayed cooperation. In contrast, a complementarity effect stabi- lizes long-term cooperation, because early commitments in abatement induce countries to invest more in low-carbon technologies, and create additional knowledge spillovers. Con- trasting both effects, we endogenize the timing of climate agreements.

Suggested Citation

  • Robert C. Schmidt & Roland Strausz & Melanie, 2014. "On the Timing of Climate Agreements," SFB 649 Discussion Papers SFB649DP2014-044, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  • Handle: RePEc:hum:wpaper:sfb649dp2014-044
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    References listed on IDEAS

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    Cited by:

    1. Ang, Chye Peng & Toper, Bruce & Gambhir, Ajay, 2016. "Financial impacts of UK's energy and climate change policies on commercial and industrial businesses," Energy Policy, Elsevier, vol. 91(C), pages 273-286.
    2. Ko, Dong Hui & Jeong, Shin Taek & Kim, Yoon Chil, 2015. "Assessment of wind energy for small-scale wind power in Chuuk State, Micronesia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 613-622.
    3. Lazarow, Andrea, 2015. "Airbnb in New York City: Law and Policy Challenges," MPRA Paper 68838, University Library of Munich, Germany.
    4. repec:eee:rensus:v:88:y:2018:i:c:p:239-257 is not listed on IDEAS
    5. Stram, Bruce Nels, 2014. "A new strategic plan for a carbon tax," Energy Policy, Elsevier, vol. 73(C), pages 519-523.
    6. Yousefi-Sahzabi, Amin & Unlu-Yucesoy, Eda & Sasaki, Kyuro & Yuosefi, Hossein & Widiatmojo, Arif & Sugai, Yuichi, 2017. "Turkish challenges for low-carbon society: Current status, government policies and social acceptance," Renewable and Sustainable Energy Reviews, Elsevier, vol. 68(P1), pages 596-608.

    More about this item

    Keywords

    climate treaty; abatement; long-term cooperation; spillover; strategic delay;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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