Scandinavian Working Papers in Economics
Memorandum,
Oslo University, Department of Economics
No 02/2013: Technology Agreements with Heterogeneous Countries
Michael Hoel () and Aart de Zeeuw ()
Additional contact information
Michael Hoel: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Aart de Zeeuw: Tilburg University
Abstract: For sufficiently low abatement costs many countries might undertake significant emission reductions even without any international agreement on emission reductions. We consider a situation where a coalition of countries does not cooperate on emission reductions but cooperates on the development of new, climate friendly technologies that reduce the costs of abatement. The equilibrium size of such a coalition, as well as equilibrium emissions, depends on the distribution across countries of their willingness to pay for emission reductions. Increased willingness to pay for emissions reductions for any group of countries will reduce (or leave unchanged) the equilibrium coalition size. However, the effect of such an increase in aggregate willingness to pay on equilibrium emissions is ambiguous.
Keywords: Technology agreement; Coalition stab ility; climate; International agreement
35 pages, January 7, 2013
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memo-02-2013.pdf
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