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Climate agreements: emission quotas versus technology policies

Author

Listed:
  • Golombek, Rolf

    (The Ragnar Frisch Centre for Economic Research)

  • Hoel, Michael

    (Dept. of Economics, University of Oslo)

Abstract

The Kyoto Agreement is the result of international negotiations over many years. However, because of a number of weaknesses, different sorts of climate agreement have been suggested: for example, coordinated R&D activities that reduce abatement costs for all firms. We will compare an agreement focusing only on emissions (a Kyoto type of agreement) with an agreement focusing only on technology, assuming that the costs of abatement are affected by R&D in all firms through technology spillovers. In an emissions agreement, emissions should be restricted to the extent that the carbon price exceeds the Pigovian level. For sufficiently low technology spillovers, an emissions agreement is more efficient than a technology agreement specifying an R&D subsidy to be imposed on all firms in all countries. The opposite may hold if technology spillovers are sufficiently large. Finally, an alternative technology agreement specifying R&D expenditure in each country is more efficient than an agreement specifying an R&D subsidy.

Suggested Citation

  • Golombek, Rolf & Hoel, Michael, 2006. "Climate agreements: emission quotas versus technology policies," Memorandum 21/2006, Oslo University, Department of Economics.
  • Handle: RePEc:hhs:osloec:2006_021
    as

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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    climate policy; international climate agreements; R&D policy; technology spillovers;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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