Global warming as an asymmetric public bad

Louis-Gaëtan Giraudet and Céline Guivarch

No 2016.26, Working Papers from FAERE - French Association of Environmental and Resource Economists

Abstract: We extend the canonical dynamic game of global warming to capture three stylized facts: (i) while most countries are expected to suffer damages, some might enjoy short-term benefits; (ii) countries’ exposure to impacts bears little relation to their mitigation capabilities; (iii) some adaptation technologies, such as air conditioning, may exacerbate warming. These sources of asymmetry add free driving to the classical free riding problem. This opens up possibilities for excessive mitigation in a non-cooperative regime, even though damages outweigh benefits. Moreover, it restricts the possibilities of Pareto improvements without transfers. Finally, it can provide a rationale for differentiating Pigouvian prices across countries.

Keywords: Differential game; Global warming; Public goods; Mitigation; Adaptation (search for similar items in EconPapers)
JEL-codes: C73 H41 Q54 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2016-09
New Economics Papers: this item is included in nep-agr, nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:fae:wpaper:2016.26

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