Strategic Investment In Climate Friendly Technologies: The Impact Of Permit Trade
The authors' point of departure is that a group of developed countries invest in the development of GreenHouse Gas (GHG) abatement technologies both at home and in developing countries. Such investments reduce the cost of future GHG abatement, and influence the future GHG abatement choices of both developed and developing countries. They show how a common permit market affects the industrialized countries' strategic investment decisions. As opposed to a situation without a permit market, the industrialized countries may want to overinvest in new GHG abatement technologies both at home and abroad.