May 2012, Volume 12, Issue 2, pp 145-163
Date: 27 Sep 2011
Technology investment, bargaining, and international environmental agreements
- Johannes Urpelainen
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If countries are to engage in international environmental cooperation, they must bargain over the distribution of gains. When future bargaining over pollution abatement is expected, how should a country decide on public technology investments to reduce the domestic cost of pollution abatement? I find that while countries tend to underinvest because they fail to internalize the global benefits of new technology, the magnitude of the problem depends on a country’s bargaining power. Powerful countries underinvest less frequently, because they expect to reap most of the global benefits from new technology in the international negotiations. I also investigate the effectiveness of a simple reciprocal technology agreement. I find that it can help solve the underinvestment problem, and this beneficial effect is particularly pronounced in the case of powerful countries. These findings imply that changing the bargaining protocol on climate change to the benefit of powerful countries may help secure the necessary technology investments.
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- Technology investment, bargaining, and international environmental agreements
International Environmental Agreements: Politics, Law and Economics
Volume 12, Issue 2 , pp 145-163
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- Springer Netherlands
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- Environmental agreements
- International cooperation
- Clean technology
- Game theory
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- Author Affiliations
- 1. Department of Political Science, Columbia University, 420 W 118th St 712 IAB, 10027, New York, NY, USA