@article{Wey:331013,
      recid = {331013},
      author = {Wey, Kwo-Dong and Chen, Jye-Chen},
      title = {Clean Development Mechanism, Technological Diffusion  Effect and Economic Growth},
      address = {2002},
      pages = {19},
      year = {2002},
      note = {Presented at the 5th Annual Conference on Global Economic  Analysis, Taipei, Taiwan},
      abstract = {The reduction of GHG emission has become an important  issue in the world since 1992. The「clean development  mechanism」has been proposed allowing the non-Annex I  countries to join the joint-implementation project in 1997  Kyoto Protocol. However, there are a few researches that  deal with it till now. It is believed that the issues of  pollution abatement, technological diffusion effects, and  economic growth have trilateral relationships. But most  studies talked about two issues among them only. Keeler &  Zeckhauser (1971), Brock (1977), Tahvonen & Kuulu-Vainen  (1991), Huang & Chen (1993), and Huang & Lee (2000)  believed that pollution abatement would affect the economic  growth. Milliamn & Prince (1989) and Goulder & Ma-Thai  (2000) concluded that pollution control could generate  technological diffusion effects. Barro & Sala-I-Martin  (1995, 1997) employed the optimal control model to discuss  the relationships between technological diffusion effects  and economic growth. This study applies the optimal control  theory that is similar to Barro & Sala-I-Martin (1997) and  Goulder & Ma-Thai (2000) applied. It is to discuss the  impacts of technological diffusion effects on economic  growth of the investing country and the host country,  respectively, under the clean development mechanism. Four  conclusions are obtained as follows: 1.The investing  country has higher economic growth rate with more CO2  emission under the clean development mechanism. 2.The  country with advanced technology of CO2 abatement usually  has higher economic growth rate. This is because the  country can accumulate intermediate inputs easily and is  treated as the source of technological progress and the  reason of increasing economic growth rate. 3.The sum of two  countries’ CO2 emission can reach the proposed level under  CDM. Meanwhile, each country can also promote economic  growth rate respectively. The investing country gets all  CERs from the host country and then increases its products  and economic growth rate under CDM. The host country can  obtain technological diffusion effect that induces the  higher growth rate by applying the advanced CO2 abatement  technology. 4.In terms of stable equilibrium, the  increasing rate of economic growth for the host country is  higher than that in the investing country. Two countries’  economic growth rates will converge to the same level  finally. However, the nominal output level of investing  country is always higher than that of the host country  under CDM.},
      url = {http://ageconsearch.umn.edu/record/331013},
}