We show that a technological breakthrough that reduces CO2 emissions per output can exacerbate the climate change problem: countries may respond by raising their emissions resulting in an increase of the stock of pollution that may reduce welfare. Using parameter values based on empirical...

We show that adaptive measures undertaken by countries in the face of climate change, apart from directly reducing the damage caused by climate change, may also indirectly mitigate greenhouse gas emissions by increasing the stable size of international agreements on emission reductions....