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2014-09-05Buch DOI: 10.18452/4531
On the Timing of ClimateAgreements
Schmidt, Robert
Strausz, Roland
A central issue in climate policy is the question whether long-term targets for green- house gas emissions should be adopted. This paper analyzes strategic effects related to the timing of such commitments. Using a two-country model, we identify a redistributive effect that undermines long-term cooperation when countries are asymmetric and side payments are unavailable. The effect enables countries to shift rents strategically via their R&D efforts under delayed cooperation. In contrast, a complementarity effect stabi- lizes long-term cooperation, because early commitments in abatement induce countries to invest more in low-carbon technologies, and create additional knowledge spillovers. Con- trasting both effects, we endogenize the timing of climate agreements.
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DOI
10.18452/4531
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https://doi.org/10.18452/4531
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<a href="https://doi.org/10.18452/4531">https://doi.org/10.18452/4531</a>