Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/74137
Authors: 
Hoel, Michael
Golombek, Rolf
Year of Publication: 
2006
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 42.2006
Abstract: 
We study an international climate agreement that assigns emission quotas to each participating country. Unlike the simplest models in the literature, we assume that abatement costs are affected by R&D activities undertaken in all firms in all countries, i.e. abatement technologies are endogenous. In line with the Kyoto agreement we assume that the international climate agreement does not include R&D policies. We show that for a second-best agreement, marginal costs of abatement should exceed the Pigovian level. Moreover, marginal costs of abatement differ across countries in the second-best quota agreement with heterogeneous countries. In other words, the second-best outcome cannot be achieved if emission quotas are tradable.
Subjects: 
Climate Policy
International Climate Agreements
Emission Quotas
Technology Spillovers
JEL: 
H23
O30
Q20
Q25
Q28
Document Type: 
Working Paper

Files in This Item:
File
Size





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