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The Climate Policy Hold‐Up: Green Technologies, Intellectual Property Rights, and the Abatement Incentives of International Agreements

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  • Timo Goeschl
  • Grischa Perino

Abstract

The success of global climate policies over the coming decades depends on the diffusion of “green” technologies. Using a simple model, we highlight a conflict between international environmental agreements (IEAs) on emissions reductions and international systems of intellectual property rights (IPRs) on abatement technologies. When IPRs are strong and global, IEA signatories anticipate rent extraction by innovators. This hold‐up effect reduces abatement, potentially to levels below those of non‐signatories, and it reduces the number of signatories to self‐enforcing IEAs. We explore policy options that respect existing property rights, but avoid the strategic interaction between signatories to an IEA and innovators.

Suggested Citation

  • Timo Goeschl & Grischa Perino, 2017. "The Climate Policy Hold‐Up: Green Technologies, Intellectual Property Rights, and the Abatement Incentives of International Agreements," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(3), pages 709-732, July.
    • Handle: RePEc:bla:scandj:v:119:y:2017:i:3:p:709-732
    DOI: 10.1111/sjoe.12179
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    3. Hans Gersbach & Marie-Catherine Riekhof, 2022. "Technology Treaties And Climate Change," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 13(02), pages 1-42, May.
    4. Santiago J. Rubio, 2018. "Self-Enforcing International Environmental Agreements: Adaptation and Complementarity," Working Papers 2018.29, Fondazione Eni Enrico Mattei.
    5. Heyen, Daniel, 2016. "Strategic conflicts on the horizon: R&D incentives for environmental technologies," LSE Research Online Documents on Economics 68104, London School of Economics and Political Science, LSE Library.
    6. Tiziano Distefano & Simone D’Alessandro, 2021. "A new two-nested-game approach: linking micro- and macro-scales in international environmental agreements," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 21(3), pages 493-516, September.
    7. Matthieu Glachant & Julie Ing & Jean Philippe Nicolai, 2017. "The Incentives for North-South Transfer of Climate-Mitigation Technologies with Trade in Polluting Goods," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(3), pages 435-456, March.
    8. Fuhai Hong & Larry Karp & Tat-How Teh, 2021. "Identity in public goods contribution," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 57(3), pages 617-664, October.
    9. Daniel Heyen, 2016. "Strategic Conflicts On The Horizon: R&D Incentives For Environmental Technologies," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 7(04), pages 1-27, November.
    10. Thomas Eichner & Gilbert Kollenbach & Mark Schopf, 2021. "Buying versus Leasing Fuel Deposits for Preservation," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(1), pages 110-143, January.
    11. Haiyang Xia & Tijun Fan & Xiangyun Chang, 2019. "Emission Reduction Technology Licensing and Diffusion Under Command-and-Control Regulation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(2), pages 477-500, February.
    12. Siying Yang & Fengshuo Liu & Gege Wang & Dawei Feng, 2024. "Intellectual property system and urban green innovation: Evidence from China," Growth and Change, Wiley Blackwell, vol. 55(1), March.
    13. Aldona Małgorzata Dereń & Jan Skonieczny, 2022. "Green Intellectual Property as a Strategic Resource in the Sustainable Development of an Organization," Sustainability, MDPI, vol. 14(8), pages 1-11, April.
    14. McEvoy, David M. & McGinty, Matthew, 2018. "Negotiating a uniform emissions tax in international environmental agreements," Journal of Environmental Economics and Management, Elsevier, vol. 90(C), pages 217-231.
    15. Hans Gersbach & Quirin Oberpriller & Martin Scheffel, 2019. "Double Free-Riding in Innovation and Abatement: A Rules Treaty Solution," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(2), pages 449-483, June.
    16. Ryusuke Shinohara, 2021. "Voluntary Participation in International Environmental Agreements and Authority Structures in a Federation: A Note," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 79(1), pages 25-32, May.

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