Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/113916 
Year of Publication: 
2015
Series/Report no.: 
Nota di Lavoro No. 11.2015
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
Abstract: 
We determine the core characteristics of a climate coalition's optimal policies in a dynamic two country directed technical change framework. Unilateral policies alter the structure of production and thereby innovation incentives across countries. Whenever feasible, optimal policies implement sustainable growth by directing global innovation to the nonpolluting sector. If nonparticipants drive global innovation, this requires policies relocating clean production to nonparticipants. A calibration exercise suggests that the US or EU alone are too small to implement sustainable growth. A coalition of Annex I countries that signed the Kyoto protocol can implement sustainable growth, yet required tax rates are very high.
Subjects: 
Sustainable Growth
Technical Change
Innovation
JEL: 
Q5
Q56
Document Type: 
Working Paper

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