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Can strategic technology development improve climate cooperation? A game-theoretic analysis

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Mitigation and Adaptation Strategies for Global Change Aims and scope Submit manuscript

Abstract

Clean technology has figured prominently in recent debates on international climate policy. This article offers a game-theoretic investigation of the possibility and effectiveness of strategic technology development: environmental leaders setting policies that reduce the global cost of clean technology. The game-theoretic model combines technology development and adoption with pollution abatement, and it allows technology costs to differ across countries. The key theoretical findings are as follows. First, free riding is an obstacle to technology development in two ways: countries fail to fully internalize the beneficial effect of technology development on (i) global pollution abatement and (ii) the reduced cost of technology adoption in outsider countries. Second, strategic technology development can be effective when (i) a key group of frontrunner countries prefers to invest in research and development and (ii) many other countries are willing to adopt the new technology. The findings suggest that strategic technology deployment by a group of frontrunners can enable more effective climate cooperation in the future.

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Notes

  1. In this article, “technology development” refers to measures intended to significantly reduce the cost of using an immature technology, such as solar photovoltaics or offshore wind. “Strategic technology development” refers to public policies that countries enact to promote the diffusion of clean technology, and thus achieve more global mitigation.

  2. Here, “frontrunner countries” refers to countries that are interested in climate mitigation and capable of developing advanced energy technologies.

  3. According to Dechezleprêtre et al. (2011), who study invention and adoption of thirteen climate technologies, two-thirds of all innovation have been concentrated in three countries: Germany, Japan, and the United States. Interestingly, three emerging markets—China, Russia, and South Korea—are also now major innovation centers. See also Victor (2011, 154–164).

  4. This assumption implies that the model is based on complete information. For the implications of relaxing the assumption, refer to the conclusion.

  5. In the implementation of such a scheme, it would also be important to heed to the problem of measuring clean technology innovation and its effects on climate mitigation.

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Authors and Affiliations

  1. Department of Political Science, Columbia University, 420 West 118th Street, 712 International Affairs Building, New York, NY, 10027, USA

    Johannes Urpelainen

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  1. Johannes Urpelainen
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Correspondence to Johannes Urpelainen.

Additional information

I thank Alton Worthington, Scott Barrett, Robert O. Keohane, the anonymous reviewers, the editors, and a seminar audience at Columbia University for valuable advice.

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Urpelainen, J. Can strategic technology development improve climate cooperation? A game-theoretic analysis. Mitig Adapt Strateg Glob Change 18, 785–800 (2013). https://doi.org/10.1007/s11027-012-9388-0

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