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Climate Policy with Technology Transfers and Permit Trading

Author

Listed:
  • Carsten Helm

    (Carl von Ossietzky Universität Oldenburg, Institut für Volkswirtschaftslehre & ZenTra)

  • Stefan Pichler

    (KOF Swiss Economic Institute, ETH Zürich)

Abstract

In this paper, we analyze technology transfers (TT) and tradable emission rights, which are core is-sues of the ongoing climate negotiations. Subsidizing TT leads to the adoption of better abatement technologies in the South, thereby reducing the international permit price. This is beneficial for the North as long as it is a permit buyer; hence it chooses to subsidize TT. By contrast, the permit selling South suffers from the lower permit price and its welfare usually deteriorates, despite receiving subsidies. We also consider how TT affects countries’ non-cooperative choices of permit endowments and find that it tends to reduce overall emissions. Finally, a simple numerical simulation model illustrates the results and explores some further comparative statics.

Suggested Citation

  • Carsten Helm & Stefan Pichler, 2014. "Climate Policy with Technology Transfers and Permit Trading," ZenTra Working Papers in Transnational Studies 31 / 2014, ZenTra - Center for Transnational Studies, revised Jan 2014.
    • Handle: RePEc:zen:wpaper:31
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    Citations

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    Cited by:

    1. Thierry Bréchet & Yann Ménière & Pierre M. Picard, 2016. "The Clean Development Mechanism in a world carbon market," Canadian Journal of Economics, Canadian Economics Association, vol. 49(4), pages 1569-1598, November.
    2. Doda, Baran & Quemin, Simon & Taschini, Luca, 2019. "Linking permit markets multilaterally," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    3. Habla, Wolfgang & Winkler, Ralph, 2018. "Strategic delegation and international permit markets: Why linking May fail," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 244-250.
    4. Matthieu Glachant & Julie Ing & Jean Philippe Nicolai, 2017. "The Incentives for North-South Transfer of Climate-Mitigation Technologies with Trade in Polluting Goods," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(3), pages 435-456, March.
    5. Gunter Stephan & Georg Müller-Fürstenberger, 2014. "Global Warming, Technological Change and Trade in Carbon Energy: Challenge or Threat?," Discussion Papers of DIW Berlin 1397, DIW Berlin, German Institute for Economic Research.
    6. Holtsmark, Katinka & Midttømme, Kristoffer, 2021. "The dynamics of linking permit markets," Journal of Public Economics, Elsevier, vol. 198(C).
    7. CHENG, Haitao & YANASE, Akihiko, 2025. "International Transfers of Green Technology and Carbon Mitigation Outcomes," Discussion paper series HIAS-E-154, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    8. Gunter Stephan & Georg Müller-Fürstenberger, 2015. "Global Warming, Technological Change and Trade in Carbon Energy: Challenge or Threat?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(4), pages 791-809, December.
    9. Habla, Wolfgang & Winkler, Ralph, 2015. "Strategic Delegation and Non-cooperative International Permit Markets," Working Papers in Economics 636, University of Gothenburg, Department of Economics.
    10. Fabio Antoniou & Panos Hatzipanayotou & Nikos Tsakiris, 2021. "Strategic Export Motives and Linking Emission Markets," CESifo Working Paper Series 8847, CESifo.
    11. Greys Sošić, 2023. "Stable Linking of the Emission Permit Markets," Sustainability, MDPI, vol. 15(6), pages 1-27, March.

    More about this item

    Keywords

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    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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