Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/192430
Authors: 
Greaker, Mads
Rosendahl, Knut Einar
Year of Publication: 
2006
Series/Report no.: 
Discussion Papers No. 448
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
According to environmental interests groups governments should use their climate policy strategically in order to provide for a faster introduction of new, cleaner technologies. Strategic use of climate policy could also induce the development of a successful upstream abatement technology industry like the Danish windmill industry. Interestingly, this latter question has not been analyzed theoretically before. Our point of departure is a three-stage game between a government in a small country with a climate restriction, and a limited number of firms supplying carbon abatement technology. The government moves first, and may use its climate policy strategically to influence the behavior of the upstream technology firms. An especially stringent climate policy towards the polluting downstream sector may then in fact be well founded. It will increase the competition between the technology suppliers, and lead to lower domestic abatement costs. However, to our surprise, a strict environmental policy is not a particularly good industrial policy with respect to developing new successful export sectors.
Subjects: 
Strategic climate policy
Abatement technology
Small
open economies
JEL: 
O32
Q2
Q25
Document Type: 
Working Paper

Files in This Item:
File
Size
813.93 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.