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The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Friebel, Guido / Requate, Till / Tsui, Kevin / Wichardt, Philipp / Zulehner, Christine

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Unilateral Emission Reductions and Cross-Country Technology Spillovers

Rolf Golombek1 / Michael Hoel2

1Frisch Centre,

2Univerisity of Oslo,

Citation Information: Advances in Economic Analysis & Policy. Volume 3, Issue 2, ISSN (Online) 1538-0637, DOI: 10.2202/1538-0637.1318, September 2004

Publication History

Published Online:
2004-09-14

Abstract

With limited participation in an international climate agreement, standard economic analysis suggests that a unilateral action taken by a group of countries in order to reduce its emissions is likely to be undermined by increases in emissions from other countries (carbon leakage). While analyses of carbon leakage typically have regarded the technology in each country as given, abatement technologies are in reality endogenous, and thus technology development may be affected by environmental policies. We demonstrate that with endogenous technologies and technology diffusion between countries, it is no longer obvious that reduced emissions in some countries will increase emissions in other countries. We identify cases in which reduced emissions in some countries might reduce emissions also in other countries.

Keywords: transboundary pollution; unilateral environmental action; R&D investments; technology spillovers

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