Climate Clubs: Overcoming Free-Riding in International Climate Policy

William Nordhaus

American Economic Review, 2015, vol. 105, issue 4, 1339-70

Abstract: Notwithstanding great progress in scientific and economic understanding of climate change, it has proven difficult to forge international agreements because of free-riding, as seen in the defunct Kyoto Protocol. This study examines the club as a model for international climate policy. Based on economic theory and empirical modeling, it finds that without sanctions against non-participants there are no stable coalitions other than those with minimal abatement. By contrast, a regime with small trade penalties on non-participants, a Climate Club, can induce a large stable coalition with high levels of abatement. (JEL Q54, Q58, K32, K33)

JEL-codes: K32 K33 Q54 Q58 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/aer.15000001
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Citations: View citations in EconPapers (446)

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