On the optimal allocation of green-technologies under climate change agreements

Abstract

This thesis investigates if a technology transfer mechanism can help to reach a cooperative outcome, in a game on a climate change treaty that involves emission caps for both developed and developing country. A climate change treaty without the inclusion of developing countries and their acceptance of emission limits is likely to be ineffective. Too little research and development of green-technology is currently undertaken, considering its potentially global impact especially in developing countries. Analysing a simple game with two asymmetric players, a tentative result is that the technology transfer mechanism considered here cannot help to establish the cooperative outcome as a Nash-equilibrium. However, the inclusion of secondary benefits in the payoff function, which are likely to occur when such a transfer takes place, could change this result.