The authors offer a provisional assessment of where the Kyoto negotiations have left the climate change issue. They present a few widely divergent assesments of what the Kyoto Protocol on Climate Change will accomplish, and describe some differing interpretations of its text in the context of the underlying international disagreement, as well as in differing perceptions of the underlying science and economics. The paper includes a brief but up-to-date summary of what we know and don't know about human influences on climate, and what it might take to restrain them.

About the book: This book covers some of the most relevant issues in the new environmental economics. Its main emphasis is on the international dimension of environmental phenomena, which implies the necessity of designing properly coordinated economic/environmental policies. The issue of policy coordination is analysed both in the case where environmental externalities arise because of cross-country and global pollution flows, and in the case where trade and competitiveness effects induced by environmental regulation affect countries' relative economic performance. The context in which these issues are analysed relies on recent developments of game theory, industrial economics, international trade where imperfect competition and governments' strategic interactions are accounted for. Recognizing that traditional environmental policy tools are not sufficient to regulate the present environment--economy interactions leads to appraise the effects of more sophisticated policy mixes. In particular, policies to stimulate technological innovation, to regulate industrial markets, to offset negative trade effects are examined. Attention is also devoted to the issue of economic growth. Under which conditions is endogenous growth consistent with environmental protection? Which policy mix can loosen the traditional tradeoff between environment and growth? These are two of the many critical questions which are addressed, and which find very interesting, albeit preliminary, answers.

Climate change is an issue of risk management. The most important causes for concern are not the median projections of future climate change, but the low-probability, high-consequence impacts. Because the policy question is one of sequential decision making under uncertainty, we need not decide today what to do in the future. We need only to decide what to do today, and future decisions can be revised as we learn more. In this study, we use a stochastic version of the DICE-99 model (Nordhaus WD, Boyer J (2000) Warming the world: economic models of global warming. MIT Press, Cambridge, MA, USA) to explore the effect of different rates of learning on the appropriate level of near-term policy. We show that the effect of learning depends strongly on whether one chooses efficiency (balancing costs and benefits) or cost-effectiveness (stabilizing at a given temperature change target) as the criterion for policy design. Then, we model endogenous learning by calculating posterior distributions of climate sensitivity from Bayesian updating, based on temperature changes that would be observed for a given true climate sensitivity and assumptions about errors, prior distributions, and the presence of additional uncertainties. We show that reducing uncertainty in climate uncertainty takes longer when there is also uncertainty in the rate of heat uptake by the ocean, unless additional observations are used, such as sea level rise.

© 2008 Springer

This study explores why international joint ventures (IJVs) based on the global South may meet with only partial success in nurturing local technological capability. The experience of China’s passenger-vehicle sector demonstrates that in the existence of a substantial technological capability gap between alliance partners, the IJV arrangement is likely to create a “passive” learning mode, and learners using this IJV arrangement may be able to strengthen their production capability but leaving their project execution and innovation capabilities largely undeveloped.