GHG Emissions, Lobbying, Free Riding, and Technological Change

Palokangas T (2010). GHG Emissions, Lobbying, Free Riding, and Technological Change. Discussion Paper No. 643, University of Helsinki, Faculty of Social Sciences, Economics Discussion Papers (April 2010)

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Abstract

I examine GHG emission policy in a world with a fixed number of regions. In each region, labor and emissions are complementary in production, total world-wide emissions decrease welfare, and total factor productivity can be improved by R&D. A subset of regions can establish an "abatement coalition", authorizing a central plan- ner to grant them non-traded or traded GHG permits. The planner is self-interested, subject to lobbying, and has no budget of its own. The results are the following. The establishment of the "abatement coalition" enhances welfare, promotes economic growth and diminishes emissions both inside and outside the coalition. With technological change due to R&D, GHG permit trade decreases welfare. Furthermore, it increases emissions and slows down economic growth, if emissions are inelastic with respect to the price for permits. Without technological change, GHG permit trade does not make any di.erence.

Item Type: Other
Uncontrolled Keywords: GHG emissions; Technological change; Lobbying
Research Programs: Dynamic Systems (DYN)
Bibliographic Reference: Discussion Paper No. 643, University of Helsinki, Faculty of Social Sciences, Economics Discussion Papers (April 2010)
Depositing User: IIASA Import
Date Deposited: 15 Jan 2016 08:44
Last Modified: 20 Jan 2016 16:46
URI: http://pure.iiasa.ac.at/9387

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