TECHNOLOGY TREATIES AND CLIMATE CHANGE

Abstract

We introduce an international technology treaty (‘Tech Treaty’) that couples the funding of research for a more advanced abatement technology with an international emissions permit market. While each country decides on domestic permit issuance, a fraction of these permits is auctioned by an international agency. Auction revenues scale up license revenues for the innovators of abatement technologies. We show that such a treaty increases innovations and decreases emissions under plausible conditions compared to an emissions trading system without additional technology agreement. Finally, we discuss how a Tech Treaty may inspire next steps in existing technology programs.