Transboundary environmental problems and endogenous technological change A survey with particular emphasize on the climate problem
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Number in series: 6
are an increasing number of researches devoted to the mutual influence of environmental policy and technological development. Transboundary nature of the global warming, acid rain and other environmental problems gives rise to a particular spring in this broad flow of the research that focuses on the relationship between international environmental regulation and endogenous technological change. The main purpose of the paper is to make an overview of theoretical and simulation results of the analysis of this relation. The basis for efficient design of the international environmental treaty is a comparison of the outcomes of non-cooperative Nash equilibrium and the first-best social equilibrium in the presence of endogenous technological change. In the survey special attention is devoted to strategic behaviour of countries, when they deviate from the optimal environmental policy in order to affect the R&D activity of the firms engaged in imperfect competition. Then I consider the issues that focus on an asymmetry between countries and special conditions that should supplement the international agreement between asymmetric countries. An important feature of international cooperation is the absence of a central international regulator. Hence, an agreement should be voluntary and have an intrinsic means of maintaining cooperation. One of the ways to stabilize an environmental coalition is to link it to a more stable technological cooperation. I provide an overview of the research on the linkage issue.
International environmental cooperation, Endogenous technological changes, International technological diffusion
Project:Oppdragsgiver: Norges forskningsråd
Frisch prosjekt: 3112 - Climate treaties and technological change