Regional Initiatives and the Cost of Delaying Binding Climate Change Agreements

Julien Beccherle and Jean Tirole

No 628, IDEI Working Papers from Institut d'Économie Industrielle (IDEI), Toulouse

Abstract: The Kyoto and Copenhagen Protocols on climate change mitigation postponed the specification of binding commitments to a future negotiation. This paper analyzes the strategic implications of delayed negotiations. While, as iswell-understood, the incentive to free ride leads to excessive emissions prior to a binding agreement, the cost of delay is magnified by players’ attempt to secure a favorable bargaining position in the future negotiation. A “brinkmanship”, an “effort rebalancing”, and a “raising rival’s cost” effects all concur to generate high post-agreement emissions. The paper applies this general insight to a variety of policy instruments, from the issuance of forward or bankable permits to standards and green investment policies.

Keywords: International negotiations; climate change; cap and trade; bankable permits; standards (search for similar items in EconPapers)
JEL-codes: D62 F51 H23 Q52 (search for similar items in EconPapers)
Date: 2010-12
New Economics Papers: this item is included in nep-ene and nep-env
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Citations: View citations in EconPapers (5)

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Journal Article: Regional initiatives and the cost of delaying binding climate change agreements (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ide:wpaper:22587

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