Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/63209 
Year of Publication: 
2006
Series/Report no.: 
Memorandum No. 2006,21
Publisher: 
University of Oslo, Department of Economics, Oslo
Abstract: 
The Kyoto Agreement is the result of international negotiations over many years. However, because of a number of weaknesses, different sorts of climate agreement have been suggested: for example, coordinated R&D activities that reduce abatement costs for all firms. We will compare an agreement focusing only on emissions (a Kyoto type of agreement) with an agreement focusing only on technology, assuming that the costs of abatement are affected by R&D in all firms through technology spillovers. In an emissions agreement, emissions should be restricted to the extent that the carbon price exceeds the Pigovian level. For sufficiently low technology spillovers, an emissions agreement is more efficient than a technology agreement specifying an R&D subsidy to be imposed on all firms in all countries. The opposite may hold if technology spillovers are sufficiently large. Finally, an alternative technology agreement specifying R&D expenditure in each country is more efficient than an agreement specifying an R&D subsidy.
Subjects: 
climate policy
international climate agreements
R&D policy
technology spillovers
JEL: 
H23
O30
Q20
Q28
Q48
Document Type: 
Working Paper

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