In the absence of a successful international cooperative agreement over the control of
emissions there is a growing interest in the role that clean technologies may play to
alleviate the climate change problem. Within a non-cooperative transboundary pollution
game, we investigate, analytically and within a numerical example based on empirical
evidence, the impact of the adoption of a cleaner technology (i.e., a decrease in the
emission to output ratio). We show that countries may respond by increasing their
emissions resulting in an increase in the stock of pollution that may be detrimental
to welfare. This possibility is shown to arise for a significant and empirically relevant
range of parameters. It is when the damage and/or the initial stock of pollution are
relatively large and when the natural rate of decay of pollution is relatively small that
the perverse effect of clean technologies is strongest. Cooperation over the control of
emissions is necessary to ensure that the development of cleaner technologies does not
exacerbate the free riding behavior that is at the origin of the climate change problem.

JEL classifications: Q20, Q54, Q55, Q58, C73. Keywords: transboundary pollution,
renewable resource, climate change, clean technologies, differential games
Lunch is provided.