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Governing climate geoengineering: Side-payments are not enough

Riccardo Ghidoni (), Anna Lou Abatayo (), Valentina Bosetti, Marco Casari and Massimo Tavoni

No 461, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: Climate geoengineering strategies can help reduce the economic and ecological impacts of global warming. However, governing geoengineering is challenging: since climate preferences vary across countries, excessive deployment relative to the socially optimal level is likely. Through a laboratory experiment on a public good-or-bad game, we study whether side-payments can address this governance problem. While theoretically effective, our experimental results show only a modest impact of side-payments on outcomes, especially in a multilateral setup. Replacing unstructured bilateral exchanges with a treaty framework simplifies the action space and performs moderately better.

Keywords: climate governance; public good-or-bad; free-driving; transfers; promises; experiment; Coase theorem (search for similar items in EconPapers)
JEL-codes: C70 C90 H40 Q50 (search for similar items in EconPapers)
Pages: 61
Date: 2021-02, Revised 2021-02
New Economics Papers: this item is included in nep-agr, nep-env, nep-exp and nep-gth
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