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A full participation agreement on global emission reduction through strategic investments in R & D


  • Kratzsch, Uwe
  • Sieg, Gernot
  • Stegemann, Ulrike


If an emission reduction agreement with participation of all players is not enforceable because politicians are too myopic or not able to commit themselves to sustainable policies or costs of reducing emis- sions are too high, strategic investments in research and development (R&D) of green technology, for example sustainable drive-trains, can pave the way for a future treaty. Although no player will rationally reduce emissions on its own, investments in R&D by at least one player can change the strategic situation of negotiations to control emissions: Emission abatement costs will decrease so that a treaty with full par- ticipation can be achieved in future periods through time consistent sustainable policies.

Suggested Citation

  • Kratzsch, Uwe & Sieg, Gernot & Stegemann, Ulrike, 2010. "A full participation agreement on global emission reduction through strategic investments in R & D," MPRA Paper 27188, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:27188

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    References listed on IDEAS

    1. Scott Barrett, 2002. "Consensus Treaties," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 158(4), pages 529-529, December.
    2. Asheim, Geir B. & Froyn, Camilla Bretteville & Hovi, Jon & Menz, Fredric C., 2006. "Regional versus global cooperation for climate control," Journal of Environmental Economics and Management, Elsevier, vol. 51(1), pages 93-109, January.
    3. Bergin James & MacLeod W. Bentley, 1993. "Efficiency and Renegotiation in Repeated Games," Journal of Economic Theory, Elsevier, vol. 61(1), pages 42-73, October.
    4. Geir Asheim & Bjart Holtsmark, 2009. "Renegotiation-Proof Climate Agreements with Full Participation: Conditions for Pareto-Efficiency," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 43(4), pages 519-533, August.
    5. Hans-Werner Sinn, 2008. "Public policies against global warming: a supply side approach," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(4), pages 360-394, August.
    6. Carraro, Carlo & Siniscalco, Domenico, 1993. "Strategies for the international protection of the environment," Journal of Public Economics, Elsevier, vol. 52(3), pages 309-328, October.
    7. Hans-Werner Sinn, 2007. "Public Policies against Global Warming," NBER Working Papers 13454, National Bureau of Economic Research, Inc.
    8. Froyn, Camilla Bretteville & Hovi, Jon, 2008. "A climate agreement with full participation," Economics Letters, Elsevier, vol. 99(2), pages 317-319, May.
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    Cited by:

    1. Kratzsch, Uwe & Sieg, Gernot & Stegemann, Ulrike, 2012. "An international agreement with full participation to tackle the stock of greenhouse gases," Economics Letters, Elsevier, vol. 115(3), pages 473-476.

    More about this item


    emissions; discount factor; commitment; endogenous technical change; repeated prisoner’s dilemma;

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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