Regional initiatives and the cost of delaying binding climate change agreements

Julien Beccherle and Jean Tirole

Journal of Public Economics, 2011, vol. 95, issue 11, 1339-1348

Abstract: The Kyoto and Copenhagen Protocols on climate change mitigation postponed the specification of binding commitments to a future negotiation. This paper analyzes the strategic implications of delayed negotiations. While, as is well-understood, the incentive to free ride leads to excessive emissions prior to a binding agreement, the cost of delay is magnified by players' attempt to secure a favorable bargaining position in the future negotiation. A “brinkmanship”, an “effort substitution”, and a “raising rival's cost” effects all concur to generate high post-agreement emissions. The paper applies this general insight to the issuance of forward or bankable permits.

Keywords: International negotiations; Climate change; Cap and trade; Bankable permits (search for similar items in EconPapers)
JEL-codes: D62 F51 H23 Q52 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (71)

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Working Paper: Regional Initiatives and the Cost of Delaying Binding Climate Change Agreements (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:95:y:2011:i:11:p:1339-1348

DOI: 10.1016/j.jpubeco.2011.04.007

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