We study optimal pollution abatement under a mixed oligopoly game when firms engage in emissions-reducing R&D that is imperfectly appropriable. The regulator uses a tax to curb emissions. Results show that in a mixed oligopoly, the public firm has positive emissions reduction in equilibrium;...

This paper explores how a principal with time-inconsistent preferences invests optimally in technology or capital. If the current principal prefers her future self to save more, she can increase current investments complementary to future savings and decrease investments in the strategic...

Since governments can influence the demand for a new abatement technology through their environmental policy, they may be able to expropriate innovations in new abatement technology ex post. This suggests that incentives for environmental R&D may be lower than the incentives for market goods...

Green innovation is essential for climate change mitigation, but not all innovative projects deliver equal social value. We consider innovator heterogeneity in a model where the policy maker cannot observe innovation quality and directly subsidize the socially most valuable green innovations. We...

Pricing the emissions of greenhouse gases is widely considered as key to tackling climate change. While carbon pricing schemes are proliferating, the vast majority of emissions is not yet covered. Designing carbon pricing policies requires navigating crucial design choices, such as addressing...

Denmark has a highly ambitious goal of reducing greenhouse gas emissions 70 percent below 1990 levels by 2030. While there is general agreement that carbon pricing should be the centerpiece of Denmark’s mitigation strategy, pricing needs to be effective, address equity and leakage concerns,...

What is the strategic role of membership in an intergovernmental group with unanimity requirements if the group negotiates with an external player in a setting with incomplete information? Being in such a group has a strategic effect compared to negotiating as a stand-alone player and reduces...

Border Carbon Adjustment Mechanisms (BCAMs) are becoming reality in the EU and elsewhere, and recur—in very different form—in U.S. legislative proposals. But they remain contentious, with features and differences that leave the underlying welfare rationale and implications unclear. Exploring...

For a large global economy with normal goods, and an unequal world income distribution, we consider the endogenous formation and stability of an international environmental agreement (IEA) under nationally determined contributions (NDCs). Nations share green R&D efforts and enjoy R&D spillovers...