A bargaining experiment on heterogeneity and side deals in climate negotiations

Greer Gosnell and Alessandro Tavoni ()
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Greer Gosnell: London School of Economics and Political Science

Climatic Change, 2017, vol. 142, issue 3, No 20, 575-586

Abstract: Abstract The recent global climate change agreement in Paris leaves a wide gap between pledged and requisite emissions reductions in keeping with the commonly accepted 2 °C target. A recent strand of theoretical and experimental evidence establishes pessimistic predictions concerning the ability of comprehensive global environmental agreements to improve upon the business-as-usual trajectory. We introduce an economic experiment focusing on the dynamics of the negotiation process by observing subjects’ behavior in a Nash bargaining game. Throughout repeated rounds, heterogeneous players bargain over the allocation of a fixed amount of profit-generating emissions with significant losses attached to prolonged failure to reach agreement. We find that the existence of side agreements that constrain individual demands among a subset of like countries does not ensure success; however, such side agreements reduce the demands of high-emission parties. Our results highlight the importance of strong signals among high emitters in reaching agreement to shoulder a collective emission reduction target.

Keywords: Emission Reduction; Initial Endowment; Individual Demand; Climate Negotiation; Global Target (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s10584-017-1975-3

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