Abstract
This presentation deals with a simple, but nonetheless important question: Is it possible to combat with the challenge of global climate change through innovation and technology transfer even without a global treaty? Or do carbon leakage and the rebound-effect imply that it is possible to take advantage of technological improvements under the umbrella of a global arrangement only?
For answering this question a world with full international cooperation is compared with a world, where countries act non-cooperatively. More precisely, in case of non-cooperation and technology transfer three different cases are discussed. The first one is called Kyoto-plus, the second one labeled Kyoto-reversed, and the third one is nicknamed Kyoto-abolished. In all cases we employ a non-cooperative 2-stage game. Kyoto-plus means that in stage 1 the North decides: (1) to unilaterally reduce its domestic greenhouse gas emissions and (2), to transfer technological knowledge to the South. In stage 2 the South chooses its welfare maximizing inputs of carbon energy into regional production. If Kyoto-reversed is considered, in stage 1 the North decides on transferring technology while the South commits itself to reduce emissions in stage 2. Kyoto-abolished implies that although in stage 1 the North decides to transfer technologies to the South, neither the North nor the South commits them-selves on greenhouse gas mitigation. Instead in stage 2 both regions simultaneously choose their inputs of carbon energy into regional production.