The Dynamics of Climate Agreements

Bard Harstad

No 1474, Discussion Papers from Northwestern University, Center for Mathematical Studies in Economics and Management Science

Abstract: I provide a novel dynamic model with private provision of public bads and investments in technologies. The analysis is tractable and the MPE unique. By adding incomplete contracts, I derive implications of and for international climate treaties. While the non-cooperative equilibrium is bad, short-term agreements are worse due to hold-up problems. A long-term agreement should be more ambitious if it is rela- tively short-lasting and the technological externality large. The length itself should increase in this externality. With renegotiation, the outcome is rst best. The technological externalities are related to trade agreements, making them strategic substitutes to climate treatie

Keywords: Dynamic private provision of public goods; dynamic common pool prob- lems; dynamic hold-up problems; incomplete contracts; time horizon of contracts; renegotiation design; climate change; climate agreements and trade agreements (search for similar items in EconPapers)
JEL-codes: D86 F53 F55 H87 Q54 (search for similar items in EconPapers)
Date: 2009-07
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Citations: View citations in EconPapers (10)

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Related works:
Journal Article: THE DYNAMICS OF CLIMATE AGREEMENTS (2016)
Journal Article: The Dynamics of Climate Agreements (2016)
Working Paper: The Dynamics of Climate Agreements (2010)
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