However, the effort of the EU to make the Kyoto-agreement unnecessarily ex-
pensive has had the drawback of giving the USA a perfect opportunity to leave
the Kyoto-agreement: The individual reduction targets implied by the Kyoto-
agreement were accepted under the premise of access to flexible mechanisms
(Brandt and Svendsen, 2002). What is obvious now is that the reduction targets
cannot be isolated from the means by which these targets are supposed to be
implemented.
This also shows the curse of being committed to cooperation in a prisoner’s di-
lemma environment. It is only in cases where a country making a unilateral
move gets an unconditional first mover advantage that it is able to escape the
observation in Hoel (1991) that unilateral reductions never increase other coun-
tries’ reductions. Here countries must try to convince the other countries that
they should implement renewable energy systems. Could this explain why the
EU so eagerly tried to promote their industrial interests in Johannesburg by
proposing a target of 15% of all energy to come from sources such as wind-
mills? On the contrary, Brandt (2002) shows that unilateral reductions can de-
crease other countries’ emissions if such actions reveal that costs are low. But
this is only true if there exists an unconditional first mover advantage (which
could be the case for off shore windmills).
However, one of the important lessons is that it is not possible for a government
to can pick the right winners in advance. What infant industries should be pro-
tected to promote exports in the longer run? Here, luck and chances also play a
role as argued by Porter (1990). It might very well be that the best way for a
government to promote technological progress is to get the prices right. By in-
ternalising all external costs of production, the right prices will emerge, sending
the right signals to the markets, resulting in necessary structural changes that
reflect our knowledge about the state of the environment.
Energy markets are dynamic and the existence of a future need for more ”su-
tainable” energy sources is hardly doubtable. As the Executive Director of the
International Energy Agency (IEA), Robert Priddle, puts it: ”We are not on a
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