Overlapping Climate Clubs: Self-Enforcing R&D Networks to Mitigate Global Warming

Free riding incentives make it difficult to control climate change. To improve the chances of the Paris Agreement’s ambitious goal, many nations are forming scientific networks in carbon capture and storage (CCS). These networks take many forms (bilateral, hub-and-spoke, and multilateral). Studies of social interactions among scientists demonstrate that research networks are limited because of relational issues, such as lack of trust. This paper provides a rationale for the formation of various types of international CCS networks and examines their impacts on climate change. Our concept of stability focuses on Nash equilibria that are immune to coalitional deviations in overlapping networks. Players may belong to various research networks. A particular research network is a climate club. We show that in the absence of top-down coordination in clubs, the type of global network that forms depends on relational attrition. The complex task is to mitigate free riding while enhancing trust

Beautiful economic features of public landscaping in city beautiful

City beautiful was a movement of great reach and inspiration, which apparently, was initiated in Chicago in 1893 during the World’s Columbian Exposition. The movement’s premises were artistic, architectural, social, political and economic. Among the artistic and architectural aspects of the city beautiful movement, the provision of high quality public landscaping was of paramount importance. As for the economic rationale behind the movement, we encounter the thinking that a beautiful city should increase its residents’ enjoyment of the city’s attributes and hence attachment to the city, raise real estate values as well as expand city business, with larger sales of city goods and services to local and touristic customers. This paper examines the economic rationale behind the city beautiful movement. We consider a “regional” economy consisting of two adjacent cities, which are identical in many of its attributes, such as the sizes of their populations. We build a general equilibrium model for the agents (consumers and producers) in this economy and demonstrate that the economic rationale behind the city beautiful movement is sound. Each city’s wealth and welfare are proportional to its quality level and a city’s quality level is proportional to the city’s public landscaping quality

Endogenous Abatement Technology Agreements under Environmental Regulation

In a domestic market, a duopoly produces a homogeneous final good, pollution, pollution abatement, and R&D, which reduces abatement cost. One of the firms (foreign) has superior technology. The government regulates the duopoly by levying a pollution tax to maximize domestic welfare. We consider the potential implementation of three innovation agreements: cooperative research joint venture (RJV), non-cooperative RJV, and licensing. In the cooperative (non-cooperative) RJV, the firms (do not) internalize R&D spillovers. We show that, for the domestic firm, the cooperative RJV dominates, and licensing is the least desirable alternative. Although licensing is dominant for the foreign firm, it is not implementable. Both RJVs are implementable. Implementation of both types of RJVs improves the competitiveness of the domestic firm and welfare. This study yields an important policy prescription: a subsidy policy that induces the foreign firm to accept a feasible cooperative RJV when it strictly prefers a feasible non-cooperative RJV is always welfare improving