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Combating climate change with matching-commitment agreements

Chai Molina, Erol Akcay, Ulf Dieckmann, Simon Levin and Elena A. Rovenskaya
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Erol Akcay: University of Pennsylvania

No 7yc3g, SocArXiv from Center for Open Science

Abstract: Countries generally agree that global greenhouse gas emissions are too high, but prefer other countries reduce emissions rather than reducing their own. The Paris Agreement is intended to solve this collective action problem, but is likely insufficient. One proposed solution is a matching-commitment agreement, through which countries can change each other’s incentives by committing to conditional emissions reductions, before countries decide on their unconditional reductions. Here, we study matching-commitment agreements between two heterogeneous countries. We find that such agreements (1) incentivize both countries to make matching commitments that in turn incentivize efficient emissions reductions, (2) reduce emissions from those expected without an agreement, and (3) increase both countries’ welfare. Matching-commitment agreements are attractive because they do not require a central enforcing authority and only require countries to fulfil their promises; countries are left to choose their conditional and unconditional emissions reductions according to their own interests.

Date: 2018-10-05
New Economics Papers: this item is included in nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:7yc3g

DOI: 10.31219/osf.io/7yc3g

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