Pareto-efficient climate agreements

Geir Asheim and Bjart Holtsmark
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Bjart Holtsmark: Statistics Norway, https://www.ssb.no/en/forskning/ansatte

Discussion Papers from Statistics Norway, Research Department

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; non-cooperative game-theory; repeated games; weakly renegotiation-proof agreements (search for similar items in EconPapers)
JEL-codes: C72 F53 Q54 (search for similar items in EconPapers)
Date: 2007-06
New Economics Papers: this item is included in nep-ene, nep-env and nep-gth
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