DP14033 Technology Treaties and Climate Change
|Author(s):||Hans Gersbach, Marie-Catherine Riekhof|
|Publication Date:||October 2019|
|Keyword(s):||Climate Change Mitigation - Technology Promotion - R&D - International Emissions Permit Markets - International Treaty - Externalities|
|JEL(s):||H23, O31, Q54|
|Programme Areas:||Industrial Organization|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=14033|
We introduce an international technology treaty ("Tech Treaty") that couples the funding of research for a more advanced abatement technology with an international emissions permit market. While each country decides on domestic permit issuance, a fraction of these permits is auctioned by an international agency. Auction revenues scale up license revenues for the innovators of abatement technologies. We show that such a treaty increases innovations and decreases emissions under plausible conditions compared to an emissions trading system without additional technology agreement. Finally, we discuss how a Tech Treaty may inspire next steps in existing technology programs.