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Strategic uncertainty, indeterminacy, and the formation of international environmental agreements

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Title: Strategic uncertainty, indeterminacy, and the formation of international environmental agreements
Authors: Narita, Daiju Browse this author →KAKEN DB
Wagner, Ulrich J. Browse this author
Issue Date: Apr-2017
Publisher: Oxford University Press
Journal Title: Oxford Economic Papers
Volume: 69
Issue: 2
Start Page: 432
End Page: 452
Publisher DOI: 10.1093/oep/gpx001
Abstract: Since the end of the Kyoto Protocol, global climate negotiations have shifted away from setting binding short-run targets on emissions towards placing long-term limits on global warming. We investigate how this alters the incentives for participation in a technology-centred international environmental agreement (IEA) where countries choose between conventional abatement and a breakthrough abatement technology that exhibits a network externality. When switching technologies is costly, we obtain that equilibrium adoption is indeterminate because the future adoption rate is subject to strategic uncertainty. Participation in an IEA that mandates the adoption of the breakthrough technology will be complete only if countries expect that all other countries will adopt eventually. Long-run temperature targets can be regarded as a device to coordinate countries' expectations on that outcome.
Rights: This is a pre-copyedited, author-produced version of an article accepted for publication in [Oxford Economic Papers] following peer review. The version of record [Narita D., Wagner U. (2017) Strategic uncertainty, indeterminacy, and the formation of international environmental agreements, Oxford Economic Papers, 69, 432–452.] is available online at: https://doi.org/10.1093/oep/gpx001.
Type: article (author version)
URI: http://hdl.handle.net/2115/73875
Appears in Collections:経済学院・経済学研究院 (Graduate School of Economics and Business / Faculty of Economics and Business) > 雑誌発表論文等 (Peer-reviewed Journal Articles, etc)

Submitter: 成田 大樹

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