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Initial Payment and Refunding Scheme for Climate Change Mitigation and Technological Development Among Heterogeneous Countries

  • Nobuyuki Takashima EMAIL logo
Published/Copyright: June 4, 2024
The B.E. Journal of Economic Analysis & Policy
From the journal The B.E. Journal of Economic Analysis & Policy Volume 24 Issue 3

Abstract

We examine international environmental agreements (IEAs) in which heterogeneous countries work together to not only participate in the abatement of greenhouse gas emissions but also develop breakthrough technologies. In this paper, the country with the most advanced technology (i.e. the technological leader) develops a new abatement technology and distributes it to other countries (i.e. technological laggards) through licensing. We design a new mechanism to achieve cooperation among heterogeneous countries through an initial payment and refunding (IPR) scheme and licensing involving third-party organizations (TPOs). Under our new IPR scheme with licensing, the cost incurred by a technology leader in developing new technology is covered by licensing fees using a portion of the initial payments collected from technological laggards by a TPO. As a result, TPOs sustain IEAs by flexibly adjusting technological laggards’ share of costs for licensing, comprising initial payments and refunds, and the amount of the licensing payment made to the technological leader.

Keywords: international environmental agreements; technological development; third-party organizations; initial payment and refunding; licensing; heterogeneous countries
Corresponding author: Nobuyuki Takashima, School of Economics, Hiroshima University, 1-2-1 Kagamiyama, Higashi-Hiroshima 739-8525, Japan, E-mail: 

Funding source: Japan Society for the Promotion of Science

Award Identifier / Grant number: JP23K12467

Acknowledgments

The author would like to thank an anonymous referee for helpful comments and suggestions. The author is also grateful to Noriaki Matsushima, Akio Kawasaki, Chikara Yamaguchi, Yasunobu Tomoda, Koichi Miyazaki, Kei Murata, Yasunori Ouchida, and the participants of the 2023 Japanese Economic Association Autumn Meeting for their constructive comments. This research is supported by JSPS KAKENHI (grant number JP23K12467).

  1. Conflict of interest: The author declares no conflicts of interest associated with this article.

  2. Data availability: No data are used in this paper.

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Received: 2023-11-14
Accepted: 2024-05-20
Published Online: 2024-06-04

© 2024 Walter de Gruyter GmbH, Berlin/Boston

Articles in the same Issue

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  2. Research Articles
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  4. Incentive-Induced Social Tie and Subsequent Altruism and Cooperation
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  13. Initial Payment and Refunding Scheme for Climate Change Mitigation and Technological Development Among Heterogeneous Countries
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https://doi.org/10.1515/bejeap-2023-0382
Keywords for this article
international environmental agreements; technological development; third-party organizations; initial payment and refunding; licensing; heterogeneous countries

Articles in the same Issue

  1. Frontmatter
  2. Research Articles
  3. Asymmetric Performance Evaluation Under Quantity and Price Competition with Managerial Delegation
  4. Incentive-Induced Social Tie and Subsequent Altruism and Cooperation
  5. University Admission: Is Achievement a Sufficient Criterion?
  6. Taxing Firearms Like Alcohol or Tobacco
  7. The Growing Importance of Social Skills for Labor Market Outcomes Across Education Groups
  8. The Impact of the Affordable Care Act in Puerto Rico
  9. Strategic Individual Behaviors and the Efficient Vaccination Subsidy
  10. Is Family-Priority Rule the Right Path? An Experimental Study of the Chinese Organ Allocation System
  11. Letters
  12. Real-effort in the Multilevel Public Goods Game
  13. Initial Payment and Refunding Scheme for Climate Change Mitigation and Technological Development Among Heterogeneous Countries
  14. Edutainment and Dwelling-Related Assets in Poor Rural Areas of Peru
  15. Biased Voluntary Nutri-Score Labeling
  16. Decompositions of Inequality and Poverty by Income Source
  17. Job Loss and Migration: Do Family Connections Matter?
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