Endogenous Technology and Tradable Emission Quotas

Publisert i

Resources and Energy Economics 30 (2), 2008, pages 197-208

Sammendrag

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 with heterogeneous countries, marginal costs of abatement differ across countries. In other words, the second-best outcome cannot be achieved if emission quotas are tradable.

Fulltekst

By Rolf Golombek and Michael Hoel
Published June 24, 2011 12:55 PM - Last modified June 24, 2011 1:25 PM