Climate Policy and Endogenous Intellectual Property Rights Enforcement in a North-South Model

To what extent do countries enforce intellectual property rights (IPR) in the presence of global climate damages and unilateral climate policies? I develop a North-South model with endogenous innovation in a clean and a dirty sector, in which both countries enforce IPR endogenously. I find that in the presence of pollution damages and unilateral Northern climate policy, (1) domestic IPR enforcement is both a strategic substitute and a complement to foreign enforcement, (2) equilibrium patent protection is increasing in expected climate damages, (3) a unilateral environmental tax in the North decreases damages and increases welfare in both regions while increasing the potential gains of coordination in international IPR enforcement for the South and (4) high-impact global warming lowers the gains from IPR enforcement in both countries while narrowing the gap in potential gains between regions.