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How do domestic attributes affect international spillovers of CO2-efficiency?

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  • Richard Perkins
  • Eric Neumayer

Abstract

Although there is evidence that CO2-efficiency enhancing innovations in one country diffuse into other countries to contribute to the goals of climate change mitigation, very little is known about the conditions under which such international spillovers are most likely to take place. Our contribution in the present article seeks to address this gap by examining whether the strength of cross-border CO2-efficiency interdependence working through import ties and inward foreign direct investment (FDI) stocks is greater in (a) countries with lower existing levels of domestic CO2-efficiency and (b) countries with greater social capabilities in terms of a better educated workforce and a less risky institutional environment for investment. We find that less CO2-efficient countries and countries with a more investment-friendly institutional environment experience stronger FDI-weighted CO2-efficiency spillovers, whereas a higher level of human capital increases domestic receptivity to import-weighted international spillovers.

Suggested Citation

  • Richard Perkins & Eric Neumayer, 2009. "How do domestic attributes affect international spillovers of CO2-efficiency?," GRI Working Papers 8, Grantham Research Institute on Climate Change and the Environment.
  • Handle: RePEc:lsg:lsgwps:wp08
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    More about this item

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • Q27 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Issues in International Trade
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

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