
doi: 10.2139/ssrn.1287925
handle: 10419/53382
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.
International environmental agreement; pollution abatement costs; endogenous technological change., ddc:330, Q50, International Environmental Agreement, Endogenous Technological Change, D70, H87, Pollution Abatement Costs, International Environmental Agreement, Pollution Abatement Costs, Endogenous Technological Change, jel: jel:D70, jel: jel:H87, jel: jel:Q50
International environmental agreement; pollution abatement costs; endogenous technological change., ddc:330, Q50, International Environmental Agreement, Endogenous Technological Change, D70, H87, Pollution Abatement Costs, International Environmental Agreement, Pollution Abatement Costs, Endogenous Technological Change, jel: jel:D70, jel: jel:H87, jel: jel:Q50
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