Climate cooperation with technology investments and border carbon adjustment

Arbeitspapier

A central question in climate policy is whether early investments in low-carbon technologies are a useful first step towards a more effective climate agreement in the future. We introduce a climate cooperation model with endogenous R&D investments where countries protect their international competitiveness via border carbon adjustments (BCA). BCA raises the scope for cooperation and leads to a non-trivial relation between countries' prior R&D investments and participation in the coalition. We find that early investments in R&D render free-riding more attractive. Therefore, with delayed cooperation on emission abatement and ex-ante R&D investments, the outcome is often characterized by high participation but inefficiently low technology investments and abatement.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Oldenburg Discussion Papers in Economics ; No. V-371-14

Classification and Topics

• Classification: Wirtschaft ; Externalities ; International Agreements and Observance; International Organizations ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; Environmental Economics: Technological Innovation
• Subject: climate treaty ; border carbon adjustment ; border tax adjustment ; coalitions ; R&D

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Helm, Carsten ; Schmidt, Robert C.
• Event: Veröffentlichung
• (who): University of Oldenburg, Department of Economics
• (where): Oldenburg
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/105059
• Last update: 10.03.2025, 11:44 AM CET