Abstract:
Theoretical analysis and empirical evidence show that leadership behavior in climate policy through increased abatement efforts or international transfers cannot be expected to be very successful. In this paper we instead show that pioneering activities, which are based on green technological innovations carried out by a coalition of countries, may be a better approach for combatting global warming through unilateral action. In particular, we examine in an otherwise standard model of private public good supply how the success of such a policy depends on the intensity and scope of technological spillovers.