Multilateral Environmental Agreements and Environmental Technology Transfer

We develop a North-South model of international trade and transboundary pollution to analyze the relationship between environmental technology transfer and the South's incentive to sign a multilateral environmental agreement (MEA). First, we show that technology transfer could either increase or reduce the South's incentive to sign the MEA. Second, we show that the South's participation in the MEA would reduce the market incentive of technology transfer. Both results have very clear policy implications for (i) the sequence of technology transfer and the South's MEA membership and (ii) the legitimacy of South's subsidies for technology transfer