Cooperative R&d Investments and R&d Costs Recovery: Climate Change Treaties with a Breakthrough Technology

Abstract

This paper examines the climate change treaties with cooperative R&D that brings about substantial reduction in greenhouse gas emission. By developing a joiner’s gain function, we present a new approach under which countries that have invested in R&D can recover their R&D costs by breakthrough technology. Additionally, we set a new assumption that R&D costs decrease if countries collectively address R&D. If cooperative R&D efficiency is effective, recovery of R&D costs promotes further technological innovation and the broad participation in treaty.