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Title:Climate agreements and technology policy PDF Logo
Authors:Golombek, Rolf
Hoel, Michael
Issue Date:2004
Series/Report no.:Memorandum, Department of Economics, University of Oslo 2004,11
Abstract:We study climate policy when there are technology spillovers within and across countries, and the technology externalities within each country are corrected through a domestic subsidy of R&D investments. We compare the properties of international climate agreements when the inter-country externalities from R&D are not regulated through the climate agreement. With an international agreement controlling abatements directly through emission quotas, the equilibrium R&D subsidy is lower that the socially optimal subsidy.The equilibrium subsidy is even lower if the climate agreement does not specify emission levels directly, but instead imposes a common carbon tax.Social costs are higher under a tax agreement than under a quota agreement.Moreover, for a reasonable assumption on the abatement cost function, R&D investments and abatement levels are lower under a tax agreement than under a quota agreement. Total emissions may be higher or lower in a second-best optimal quota agreement than in the first-best optimum.
Subjects:Climate policy
international environmental agreements
R&D Policy
technology spillovers
JEL:H23
O30
Q20
Q28
Q48
Document Type:Working Paper
Appears in Collections:Memorandum, Department of Economics, University of Oslo

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