Endogenous technology and tradable emission quotas

By R. Golombek, M. Hoel. 2008

128 citations recorded by the source corpus.

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 secondbest 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.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/7295d4496547551604c0888341a5e58c2b87dd33

Citations in the corpus

• Cournot Competition and “Green” Innovation: An Inverted-U Relationship (2017, unknown): “The paper is also related to the literature on organisational structure of environmental R&D, cooperative versus independent (e.g., Scott (1996), Chiou and Hu (2001), Petrakis and Poyago-Theotoky (2002), Sandońıs and Mariel (2004), Poyago-Theotoky (2007), and Golombek and Hoel (2008)).”