The Review of Economics and Statistics Vol. 107 No. 6 2025
Induced Innovation and International Environmental Agreements: Evidence from the Ozone Regime
open access
Abstract
This paper revisits one of the rare success stories in global environmental cooperation: the Montreal Protocol and the phase-out of ozone-depleting substances. I show that the protocol increased science and innovation on alternatives to ozone-depleting substances and argue that agreements can indeed be useful in solving global public goods problems. This contrasts with game-theoretical predictions that agreements occur only when costs to the players are low and with the often-heard narrative that substitutes were readily available. I reconcile theory and empirics by discussing the role of induced innovation in models of environmental agreements.
- DOI
- 10.1162/rest_a_01398
- Volume
- 107
- Issue
- 6
- Pages
- 1620-1637
- Language
- en
- Sources
- crossref openalex