The Effects of R&D in Adaptation Technologies on International Environmental Agreements

The paper studies the impact of collective effort in R&D in adaptation technologies and the spillover effects when international environmental agreements (IEAs) are signed. The assumption is that adaptation has a public good favor, because new knowledge about adaptation requires investments that can benefit many countries. Members of the agreement fully share their knowledge and determine their emissions and their investments by maximizing their joint welfare, while nonmembers optimize their individual payoffs. The model is studied in a context of differential games and open-loop equilibrium is obtained. The results show the effects of R&D and of knowledge spillover between countries and the optimal trajectories of the stock pollution.