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Discussion Paper Details

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Title: R&D Cooperation and the Stability of International Environmental Agreements

Author(s): Carlo Carraro and Domenico Siniscalco

Publication Date: April 1995

Keyword(s): Coalition, Environment, Global Warming, Innovation and Negotiations

Programme Area(s): International Macroeconomics

Abstract: International agreements to protect the global environment are typically difficult to reach. In principle they should be profitable for all players involved in the negotiation. Even when they are profitable, however, they are often unstable due to the incentive to free-ride (enjoying the clean environment provided by others' emission reduction without paying the cost). One possible way to overcome this problem is to link the unstable environmental agreement to other agreements which are profitable and stable. This paper presents a model where an environmental negotiation, which is profitable but unstable, is `stabilized' by linking it to an agreement on R&D cooperation, which is shown to be profitable and stable. The optimality of this linkage is also discussed.

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Bibliographic Reference

Carraro, C and Siniscalco, D. 1995. 'R&D Cooperation and the Stability of International Environmental Agreements'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1154