Pareto-Efficient Climate Agreements Can Always Be Renegotiation-Proof

Geir Asheim and Bjart Holtsmark

No 23/2008, Memorandum from Oslo University, Department of Economics

Abstract: Recent contributions show that climate agreements with broad participation can be implemented as weakly renegotiation-proof equilibria in simple models of greenhouse gas abatement where each country has a binary choice between cooperating (i.e., abate emissions) or defecting (no abatement). Here we show that this result carries over to a model where countries have a continuum of emission choices. Indeed, a Pareto-efficient climate agreement can always be implemented as a weakly renegotiation-proof equilibrium, for a sufficiently high discount factor. This means that one need not trade-off a “narrow but deep” treaty with a “broad but shallow” treaty.

Keywords: Climate agreements; Pareto-effiency; greenhouse gases (search for similar items in EconPapers)
JEL-codes: A10 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2008-08-12
New Economics Papers: this item is included in nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:osloec:2008_023

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