The Incentives for North-South Transfer of Climate-Mitigation Technologies with Trade in Polluting Goods

The need to transfer climate mitigation technologies towards the developing world has been acknowledged since the beginning of climate negotiations. Little progress has however been made, as shown by Article 10 of the Paris Agreement. One reason is that these technologies could become vital assets t...

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Bibliographic Details
Published in:Environmental & resource economics 2017-03, Vol.66 (3), p.435-456
Main Authors: Glachant, Matthieu, Ing, Julie, Nicolai, Jean Philippe
Format: Article
Language:English
Subjects:
Carbon
Clean technology
Climate change
Climate change mitigation
Competition
Cooperation
Developing countries
Economic Policy
Economics
Economics and Finance
Emissions
Emissions trading
Environmental Economics
Environmental Law/Policy/Ecojustice
Environmental Management
Environmental policy
Global economy
Government
Greenhouse effect
Humanities and Social Sciences
Incentives
Intellectual property
LDCs
Paris Agreement
Quotas
Studies
Technology transfer
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Summary:The need to transfer climate mitigation technologies towards the developing world has been acknowledged since the beginning of climate negotiations. Little progress has however been made, as shown by Article 10 of the Paris Agreement. One reason is that these technologies could become vital assets to compete on global markets. This paper presents a partial equilibrium model with two regions, the North and the South, and imperfect competition in the international polluting goods market, to analyze the North’s incentives to accept technology transfer. Results crucially depend on the existence of environmental cooperation. When both northern and southern governments set emission quotas non-cooperatively, inducing fewer global emissions is a necessary, but not sufficient condition for the North to accept the transfer. In contrast, when governments set quotas cooperatively, the North has no incentive to share its technology either before or after the agreement. Technology transfer commitments may be included in the agreement, but with no effect on global emissions and global surplus. The only impacts are distributional, technology transfers and side payments may be substitute instruments.
ISSN:0924-6460
1573-1502
DOI:10.1007/s10640-016-0087-2