Heterogeneity and Global Climate Action

Giorgos Galanis, Giorgio Ricchiuti and Ben Tippet
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Giorgos Galanis: Queen Mary University of London, Centre for Economic Theory and its Applications, University of Warwick
Ben Tippet: King’s College London, University of London

CRETA Online Discussion Paper Series from Centre for Research in Economic Theory and its Applications CRETA

Abstract: Countries respond differently to climate change, and while this resulting behavioral heterogeneity is empirically observed, its impact on the evolution of global climate action has not been analyzed. This leads to two related questions that we address: (i) what is the role of the variation of preferences in the global political economy of climate action ; and (ii) what are the necessary conditions for sustained high levels of global action? We develop an evolutionary political economy integrated assessment model where heterogeneous countries, in each period, choose whether to take action to reduce emissions or not. Countries’ choices are influenced by their current level of emissions, total participation in climate action, and other idiosyncratic factors capturing their heterogeneity, which depends on income inequality across countries, vulnerability to climate damages, and other political economy factors. Our model shows the possibility of various outcomes, where high levels of sustained global action is only one possibility. The key result is that sustained high levels of global action are achieved only if there is a low degree of heterogeneity in countries’ preferences for action and a strong peer pressure effect.

Keywords: Climate action; Heterogeneous agents; Evolutionary dynamics; Integrated assessment JEL Codes: C62; E71; F5; Q54; Q58 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-ene and nep-env
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