Ralph Winkler, University of Bern
Department seminar. Ralph Winkler is a Professor at the University of Bern. He will present a paper entitled "Incentives for Technology Investments in International Climate Policy".
We develop a simple game-theoretic model to investigate the relationship between greenhouse gas emissions and investments into four broad classes of technologies that are relevant for the mitigation of anthropogenic climate change: (i) emission abatement (end-of-pipe) technologies, (ii) energy efficiency technologies, (iii) low-carbon technologies and (iv) climate adaptation technologies. We show that the well-known public good property of GHG emission reductions has repercussions on individual and global emissions: While a better low-carbon and a better abatement technology reduces domestic and global emission, higher energy efficiency and a better adaptation technology increases domestic and global emissions. Because of the strategic substitutability of emission choices, this implies that the strategic interaction with respect to GHG emissions hinders the incentives to invest into a better low-carbon and a better abatement technology and fosters the incentive to invest into better energy efficiency and adaptation technology. Surprisingly, this result holds for both non-cooperative and cooperative international climate policies.
Host: Christian Traeger