Technology Spillovers and Stability of International Climate Coalitions

32 Pages Posted: 19 Nov 2007

See all articles by Miyuki Nagashima

Miyuki Nagashima

Wageningen University

Rob Dellink

Wageningen UR - Environmental Economics and Natural Resources Group; Organization for Economic Co-Operation and Development (OECD)

Date Written: November 2007

Abstract

Cooperation in international environmental agreements appears difficult to attain because of strong free riding incentives. This paper explores how different technology spillover mechanisms among regions can influence the incentive structures to join and stabilize an international agreement. We use an applied modeling framework (STACO) that enables us to investigate stability of partial climate coalitions. Technology spillovers to coalition members increase their incentives to stay in the coalition and reduce abatement costs, which leads to larger global payoffs and a lower global CO2 stock. Several theories on the impact of technology spillovers are evaluated by simulating a range of alternative specifications. We find that while spillovers are a good instrument to improve stability of bilateral agreements, they cannot overcome the strong free rider incentives that are present in larger coalitions. This conclusion is robust against the specification of technology spillovers.

Keywords: Climate Change Modelling, International Environmental Agreements, Non-cooperative Game Theory, Technology Spillovers

JEL Classification: C72, O33, Q54

Suggested Citation

Nagashima, Miyuki and Dellink, Rob, Technology Spillovers and Stability of International Climate Coalitions (November 2007). FEEM Working Paper No. 98.2007, Available at SSRN: https://ssrn.com/abstract=1031085 or http://dx.doi.org/10.2139/ssrn.1031085

Miyuki Nagashima (Contact Author)

Wageningen University ( email )

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6700 HB Wageningen, 6706KN
Netherlands

Rob Dellink

Wageningen UR - Environmental Economics and Natural Resources Group ( email )

P.O. Box 8130
Wageningen, 6700 EW
Netherlands
+31 (0)317 4 82009 (Phone)
+31 (0)317 4 84933 (Fax)

HOME PAGE: http://www.sls.wau.nl/enr/staff/dellink/

Organization for Economic Co-Operation and Development (OECD) ( email )

Paris
France

HOME PAGE: http://www.oecd.org/env/cc/econ

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