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The Dynamics of Climate Agreements

Bard Harstad

No 2962, CESifo Working Paper Series from CESifo

Abstract: I develop a dynamic model of private provision of public bads allowing investments in technologies. The analysis is tractable and the MPE unique. The framework is used to derive optimal incomplete contracts in a dynamic setting. While the noncooperative equilibrium is very inefficient, short-term contracts can be worse due to hold-up problems. The optimal long-term contract is more ambitious if its length is relatively short and the technological spillover large. The optimal length increases in this externality. With renegotiation, the outcome is first best. The results have several implications for how to design a climate treaty.

Keywords: dynamic private provision of public goods; dynamic common pool problems; dynamic hold-up problems; incomplete contracts; contract-length; renegotiation design; climate change and climate agreements (search for similar items in EconPapers)
JEL-codes: D86 F53 F55 H87 Q54 (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: THE DYNAMICS OF CLIMATE AGREEMENTS (2016) Downloads
Journal Article: The Dynamics of Climate Agreements (2016) Downloads
Working Paper: The Dynamics of Climate Agreements (2009) Downloads
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