However, this view does not take into account the possible existence of first
mover advantages. The emergence of new technologies can make the difference
between success and failure of negotiations. As an example, according to Bene-
dict (1991) og Sandler (1997), a crucial breakthrough enabling an agreement on
the control of ozone layer depleting substances occurred, when innovators suc-
ceeded in producing substitution substances, such that the economic inventive
changed dramatically.
2.2 First mover advantages and switch points
First mover advantages in the case we consider relate to technological leader-
ship that materializes in export opportunities. Such technological advances can
result due to either deliberate R&D in a selected area, or result as side effects of
other types of actions, e.g. political actions. As an example of the latter, it is ar-
gued that subsidizing of wind energy after the first oil crisis in 1973 caused the
Danish development of the wind turbine industry. The most important subsidy
has been a price guarantee per produced kWh (kilowatt-hour): ”Without these
subsidies, windmills as suppliers of electricity would not have been competitive
compared to traditional power plants and hence the producers of windmills
would not have got a foothold in the Danish industry. This is also illustrated by
the development in demand where a large part of the wind turbines produced in
the pioneering years in the 1980s were sold domestically whereas exports made
up a substantial part of sales in the 1990s”. (Hansen et al., 2002, p. 1). In Den-
mark, 15 per cent of all electricity in the year 2000 was from wind energy
(BTM Consult, 2001). Technological progress can also be a by-product when a
country engages in a unilateral move to cut emissions, since such a move pro-
vides incentives for investments in R&D to find less polluting technologies.
More broadly, technological progress includes development of new technolo-
gies, invention of new goods, or simply new (or better) insights gained in man-
aging the pollution substances.
These observations indicate, as suggested by Porter (1990), that, in this case, it
may indeed pay a country to subsidise its infant industries initially and then
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