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Climate coalitions: a theoretical and computational appraisal

Thierry Bréchet, Francois Gerard and Henry Tulkens ()

No 2007003, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: Using an updated version of the CWS model (introduced by Eyckmans and Tulkens in Resource and Energy Economics 2003), this paper intends to evaluate with numbers the respective merits of two competing notions of coalition stability in the standard global public goods model as customarily applied to the climate change problem. After a reminder of the model structure and of the definition of the two game theoretical stability notions involved namely, core stability and internal-external stability, the former property is shown to hold for the grand coalition in the CWS model only if resource transfers of a specific form between countries are introduced. It is further shown that while the latter property holds neither for the grand coalition nor for most large coalitions, it is nevertheless verified in a weak sense that involves transfers (dubbed "potential internal stability") for most small coalitions. The reason for this difference is brought to light, namely the differing rationale that inspires the transfers in either case. Finally, it is shown that the stable coalitions that perform best (in terms of carbon concentration and global welfare) always are composed of both industrialized and developing countries. Two sensitivity analyses confirm the robustness of all these results.

Keywords: climate change; coalitions; simulation; integrated assessment (search for similar items in EconPapers)
JEL-codes: C71 C73 D9 D62 F42 Q2 (search for similar items in EconPapers)
Date: 2007-02-01
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http://www.uclouvain.be/cps/ucl/doc/core/documents/coredp2007_3.pdf (application/pdf)

Related works:
Working Paper: Climate Coalitions: A Theoretical and Computational Appraisal (2007) Downloads
Working Paper: Climate coalitions: a theoretical and computational appraisal (2007) Downloads
Working Paper: Climate Coalitions: A Theoretical and Computational Appraisal (2007) Downloads
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