Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192503 
Authors: 
Year of Publication: 
2007
Series/Report no.: 
Discussion Papers No. 521
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
The clean development mechanism of the Kyoto Protocol may induce technological change in developing countries. As an alternative to the clean development mechanism regime, developing countries may accept a (generous) cap on their own emissions, allow domestic producers to invest in new efficient technologies, and sell the excess emission permits on the international permit market. The purpose of this article is to show how the gains from investment, and hence the incentive to invest in new technology in developing countries, differ between the two alternative regimes. We show that the difference in the gains from investment depends on whether the producers in developing countries face competitive or noncompetitive output markets, whether the investment affects fixed or variable production costs, and whether producers can reduce emissions through means other than investing in new technology.
Subjects: 
Climate Policy
Technology Adoption
Emission Trading
Clean Development Mechanism
Technological Change
Cournot Competition
JEL: 
L13
Q54
Document Type: 
Working Paper

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