Economic convergence and climate policy

This paper addresses the relevance of the economic convergence hypotheses between the developing and the developed world in international greenhouse gas (GHG) emissions negotiations. The results are based on a two-region (the OECD and the rest of the world, ROW) neo-classical growth model with exogenous technical progress, different technological diffusion patterns, and a set of geophysical relationships that consider an environmental externality linked to GHG emissions. A game framework is taken into account in the model to capture the strategic interactions between agents. The outcome of the negotiations seems indeed to depend on the economic convergence hypotheses. Faster economic growth of the ROW countries would encourage them to further mitigate carbon emissions.