Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/53382
Authors: 
Tarui, Nori
Heal, Geoffrey
Year of Publication: 
2008
Series/Report no.: 
Nota di lavoro // Fondazione Eni Enrico Mattei: Sustainable development 96.2008
Abstract: 
This paper studies countries' incentives to develop advanced pollution abatement technology when technology may spillover across countries and pollution abatement is a global public good. We are motivated in part by the problem of global warming: a solution to this involves providing a global public good, and will surely require the development and implementation of new technologies. We show that at the Nash equilibrium of a simultaneous-move game with R&D investment and emission abatement, whether the free rider effect prevails and under-investment and excess emissions occur depends on the degree of technology spillovers and the effect of R&D on the marginal abatement costs. There are cases in which, contrary to conventional wisdom, Nash equilibrium investments in emissions reductions exceed the first-best case.
Subjects: 
International Environmental Agreement
Pollution Abatement Costs
Endogenous Technological Change
JEL: 
Q50
H87
D70
Document Type: 
Working Paper

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