Cooperation on climate-change mitigation

Charles Mason, Stephen Polasky and Nori Tarui

European Economic Review, 2017, vol. 99, issue C, 43-55

Abstract: We analyze conditions under which it is possible to achieve efficient mitigation of greenhouse gas emissions with a self-enforcing international agreement in which all countries find it in their self-interest to abide by the agreement. We model the choice of emissions by countries as a dynamic game. We use a two-part punishment scheme for deviations from an agreement that is renegotiation-proof and show when this scheme supports the efficient outcome as a subgame perfect equilibrium. Using numerical examples, we show that an efficient subgame perfect equilibrium exists for a range of reasonable parameter values. The existence of such equilibrium may be non-monotonic in the discount rate and the ratio of slope of marginal abatement cost and marginal damages.

Keywords: International agreements; Climate change; Differential games (search for similar items in EconPapers)
JEL-codes: C73 Q54 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Working Paper: Cooperation on Climate-Change Mitigation (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:99:y:2017:i:c:p:43-55

DOI: 10.1016/j.euroecorev.2017.02.010

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