Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282522 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10834
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
A global monopoly supplier country of necessary inputs for the provision of global public goods has an incentive to subsidize these exports. The strategic interdependence in the global public good context reverses the "large country" incentives to manipulate the terms-of-trade. It is optimal for a monopoly supplier country to deliberately worsen its terms of trade. The existence of a global monopoly supplier increases global public good supply relative to a competitive setting. Import-dependent countries may also benefit from a monopoly supplier. While they are strategically exploited to increase their contributions to the global public good, they do so at lower costs, and they benefit from increased contributions by the other importer countries.
Subjects: 
global public goods
market power
climate policy
terms-of-trade
Inflation Reduction Act
Net Zero Industry Act
JEL: 
H41
D60
Q54
Document Type: 
Working Paper
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