Incentives for technology investments in international climate policy | Ralph Winkler

Ralph Winkler will be discussing the paper ‘Incentives for Technology Investments in International Climate Policy’.

Abstract

We develop a simple game-theoretic model to investigate the relationship between greenhouse gas emissions and investments into four broad classes of technologies that are relevant for the mitigation of anthropogenic climate change: (i) carbon efficiency technologies, (ii) low-carbon technologies, (iii) emission abatement technologies, and (iv) climate adaptation technologies. We show that the well-known public good property of emission reductions has repercussions on domestic and global emissions: While better low-carbon and better abatement technologies reduce domestic and global emission, better carbon efficiency and adaptation technologies increase them. In addition, indirect effects propagated by the change in equilibrium emissions due to a marginal technological improvement foster investment incentives in case of carbon efficiency and adaptation technologies and reduce them in case of low-carbon and abatement technologies. Surprisingly, this result holds for both non-cooperative and cooperative international climate policies.

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