We examine the impact of technological change on the stability of climate coalitions and explore how international cooperation on abatement affects the incentives of signatories to invest in R&D to reduce emissions. We compare the case of no technological change with exogenous technological change and induced technological change. In the latter case R&D investments are endogenous. We find that the highest equilibrium pay-offs are achieved in the case of induced technological change. Furthermore, the formation of a climate coalition boosts R&D investments in carbon abatement technologies in signatory countries.
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Sophia Univ, Grad Sch Global Environm Studies, Chiyoda Ku, Tokyo 1028554, JapanSophia Univ, Grad Sch Global Environm Studies, Chiyoda Ku, Tokyo 1028554, Japan
Sakaue, Shin
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Yamaura, Koichi
Washida, Toyoaki
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Sophia Univ, Grad Sch Global Environm Studies, Chiyoda Ku, Tokyo 1028554, JapanSophia Univ, Grad Sch Global Environm Studies, Chiyoda Ku, Tokyo 1028554, Japan
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Univ Western Ontario, Dept Econ, Chinese Acad Social Sci, Inst Quantitat & Tech Econ, London, ON N6A 5C2, CanadaUniv Western Ontario, Dept Econ, Chinese Acad Social Sci, Inst Quantitat & Tech Econ, London, ON N6A 5C2, Canada
Cai, Yuezhou
Riezman, Raymond
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Univ Iowa, Ctr Econ Studies, Inst Econ Res, Iowa City, IA 52242 USAUniv Western Ontario, Dept Econ, Chinese Acad Social Sci, Inst Quantitat & Tech Econ, London, ON N6A 5C2, Canada
Riezman, Raymond
Whalley, John
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Univ Western Ontario, Natl Bur Econ Res Inc, Dept Econ, London, ON N6A 5C2, CanadaUniv Western Ontario, Dept Econ, Chinese Acad Social Sci, Inst Quantitat & Tech Econ, London, ON N6A 5C2, Canada