The Role of Uncertainty and Learning for the Success of International Climate Agreements

Michael Finus () and Pedro Pintassilgo

No 2009-16, Stirling Economics Discussion Papers from University of Stirling, Division of Economics

Abstract: Technological developments intensify linkages between nations, making unilateral policies less effective. Though transnational externalities (e.g. trade, contagious diseases and terrorism) warrants coordination and cooperation between governments, this proves some times difficult. This is particularly true for international environmental agreements. One reason for meager success is the public good character of environmental protection encouraging free-riding. Another reason one might suspect are the large uncertainties surrounding most environmental problems, and in particular climate change, providing sufficient excuse to remain inactive. Paradoxically, some recent papers have concluded just the opposite: the veil of uncertainty can be conducive to the success of international environmental cooperation. This sheds serious doubts on the benefits from research on better understanding environmental impacts. In this paper, we explain why and under which conditions such a pessimistic conclusion can be true. However, taking a broader view, we argue that these unfavorable conditions are rather an exception than the rule. Most important, we suggest a mechanism that mitigates the negative effect of learning and which may even turn it into a positive effect. Our results apply beyond the specifics of climate change to similar problems of cooperation in the presence of externalities.

Keywords: cooperation; climate change; self-enforcing agreements; uncertainty; l earning (search for similar items in EconPapers)
Date: 2009-08
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://hdl.handle.net/1893/1528

Related works:
Journal Article: The role of uncertainty and learning for the success of international climate agreements (2013)
Working Paper: The Role of Uncertainty and Learning for the Success of International Climate Agreements (2012)
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