ABSTRACT
Zili Yang * Center fo r Energy and Environmental Policy Research, E40-267 M assachusetts Institute o f
Technology, 1 Am herst St., Cambridge, MA 02139, USA
Received 24 June 1996; accepted 15 November 1997
Whether developed countries should make unilateral technology transfers to developing countries in order to address global environment problems is debatable. This paper discusses the issue in a framework that recognizing nations’ joint production of environmental externalities. Unlike the existing literature on unilateral transfers, this paper presents a North-South environmental-economic optimal growth model that allows transfers to mitigate externalities only. The paper derives criteria that would make such transfers feasible. By solving the transfer problem in a modified RICE model [Nordhaus, W.D., Yang, Z., 1996. A regional dynamic general equilibrium model of alternative climate change strategies, Am. Econ. Rev., 86 (4) 741-65], this paper also provides information on ihe timing and the amount of unilateral transfers from North to South to address potential global warming problem, one major global environmental externality. A policy implication from this study is that moderate employment of unilateral transfers would benefit North along with the world as a whole. © 1999 Elsevier Science B.V. All rights reserved.
