Strategic investment in climate friendly technologies: the impact of permit trade
Our point of departure is that a group of developed countries invest in the development of greenhouse gas (GHG) abatement technologies both at home and in developing countries. Such investments reduce the cost of future GHG abatement, and influence the future GHG abatement choices of both developed and developing countries. We show how a common permit market affects the industrialized countries' strategic investment decisions. As opposed to a situation without a permit market, the industrialized countries may want to overinvest in new GHG abatement technologies both at home and abroad. That is, they increase their R&D investment to such an extent that the cost reductions from the least profitable project actually fall short of the R&D costs. Earlier research has only pointed to overinvestment abroad. Moreover, the effects of investment abroad may be tougher emission reduction targets at home, which is not possible without permit trade.
|Date of creation:||Apr 2010|
|Date of revision:|
|Contact details of provider:|| Postal: P.O.Box 8131 Dep, N-0033 Oslo, Norway|
Phone: (+47) 21 09 00 00
Fax: (+47) 21 09 49 73
Web page: http://www.ssb.no/en/
More information through EDIRC
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.:
- Hoel, M., 1989.
"Global Environmental Problems: The Effects Of Unilateral Actions Taken By One Country,"
11/1989, Oslo University, Department of Economics.
- Hoel, Michael, 1991. "Global environmental problems: The effects of unilateral actions taken by one country," Journal of Environmental Economics and Management, Elsevier, vol. 20(1), pages 55-70, January.
- Golombek Rolf & Hoel Michael, 2004. "Unilateral Emission Reductions and Cross-Country Technology Spillovers," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(2), pages 1-27, September.
- CHANDER, Parkash & TULKENS, Henry, 1994.
"A Core-Theoretic Solution for the Design of Cooperative Agreements on Transfrontier Pollution,"
CORE Discussion Papers
1994048, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Parkash Chander & Henry Tulkens, 1995. "A core-theoretic solution for the design of cooperative agreements on transfrontier pollution," International Tax and Public Finance, Springer, vol. 2(2), pages 279-293, August.
- Chander, Parkash & Tulkens, Henry, 1994. "A Core-Theoretic Solution for the Design of Cooperative Agreements on Transfrontier Pollution," Working Papers 897, California Institute of Technology, Division of the Humanities and Social Sciences.
- Chander, P. & Tulkens, H., . "A core-theoretic solution for the design of cooperative agreements on transfrontier pollution," CORE Discussion Papers RP 1158, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- John K. Stranlund, 1999. "Sunk Capital and Negotiated Resolutions of Environmental Conflicts," Land Economics, University of Wisconsin Press, vol. 75(1), pages 142-155.
- Carbone, Jared C. & Helm, Carsten & Rutherford, Thomas F., 2009.
"The case for international emission trade in the absence of cooperative climate policy,"
Journal of Environmental Economics and Management,
Elsevier, vol. 58(3), pages 266-280, November.
- Carbone, Jared C. & Helm, Carsten & Rutherford, Thomas F., 2008. "The case for international emission trade in the absence of cooperative climate policy," Darmstadt Discussion Papers in Economics 194, Darmstadt University of Technology, Department of Law and Economics.
- Wolfgang Buchholz & Kai Konrad, 1994. "Global environmental problems and the strategic choice of technology," Journal of Economics, Springer, vol. 60(3), pages 299-321, October.
- Goulder, Lawrence H. & Mathai, Koshy, 2000. "Optimal CO2 Abatement in the Presence of Induced Technological Change," Journal of Environmental Economics and Management, Elsevier, vol. 39(1), pages 1-38, January.
- John Stranlund, 1996. "On the strategic potential of technological aid in international environmental relations," Journal of Economics, Springer, vol. 64(1), pages 1-22, February.
- Helm, Carsten, 2003. "International emissions trading with endogenous allowance choices," Journal of Public Economics, Elsevier, vol. 87(12), pages 2737-2747, December.
- Bjart J. Holtsmark & Dag Einar Sommervoll, 2008. "International emissions trading in a non-cooperative equilibrium," Discussion Papers 542, Statistics Norway, Research Department.
When requesting a correction, please mention this item's handle: RePEc:ssb:dispap:615. 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: (J Bruusgaard)
If references are entirely missing, you can add them using this form.