The Dynamics of Climate Agreements

Bård Harstad

European Economic Association

Photo: European Economic Association

Published in:

Journal of the European Economic Association 2015 (published online: 4 JUN 2015)

DOI: 10.1111/jeea.12138

Abstract:

This paper analyzes a framework in which countries over time pollute and invest in green technologies. Without a climate treaty, the countries pollute too much and invest too little, particularly if intellectual property rights are weak. Nevertheless, short-term agreements on emission levels then reduce every country's payoff, since countries invest less when they anticipate future negotiations. If intellectual property rights are weak, the agreement should be tougher and more long-term. Conversely, if the climate agreement happens to be short-term or absent, intellectual property rights should be strengthened or technological licensing subsidized.

Published July 22, 2015 1:29 PM - Last modified Dec. 16, 2015 3:11 PM