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Regional initiatives and the cost of delaying binding climate change agreements

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  • Beccherle, Julien
  • Tirole, Jean

Abstract

The Kyoto and Copenhagen Protocols on climate change mitigation postponed the specification of binding commitments to a future negotiation. This paper analyzes the strategic implications of delayed negotiations. While, as is well-understood, the incentive to free ride leads to excessive emissions prior to a binding agreement, the cost of delay is magnified by players' attempt to secure a favorable bargaining position in the future negotiation. A “brinkmanship”, an “effort substitution”, and a “raising rival's cost” effects all concur to generate high post-agreement emissions. The paper applies this general insight to the issuance of forward or bankable permits.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 95 (2011)
Issue (Month): 11 ()
Pages: 1339-1348

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Handle: RePEc:eee:pubeco:v:95:y:2011:i:11:p:1339-1348

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Web page: http://www.elsevier.com/locate/inca/505578

Related research

Keywords: International negotiations; Climate change; Cap and trade; Bankable permits;

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Citations

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Cited by:
  1. Peter J. Wood & Peter Heindl & Frank Jotzo & Andreas Löschel, 2013. "Linking Price and Quantity Pollution Controls under Uncertainty," CCEP Working Papers 1302, Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University.
  2. Kai A. Konrad & Marcel Thum, 2012. "The Role of Economic Policy in Climate Change Adaptation," CESifo Working Paper Series 3959, CESifo Group Munich.
  3. Wolfgang Buchholz & Alexander Haupt & Wolfgang Peters, 2013. "International Environmental Agreements, Fiscal Federalism, and Constitutional Design," Review of International Economics, Wiley Blackwell, vol. 21(4), pages 705-718, 09.
  4. Beccherle, Julien & Tirole, Jean, 2010. "Regional Initiatives and the Cost of Delaying Binding Climate Change Agreements," IDEI Working Papers 628, Institut d'Économie Industrielle (IDEI), Toulouse.
  5. Konrad, Kai A. & Thum, Marcel, 2011. "Unilateral action and negotiations about climate policy," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2011-109, Social Science Research Center Berlin (WZB).
  6. Carsten Helm & Franz Wirl, 2014. "The Principal-Agent Model with Multilateral Externalities: An Application to Climate Agreements," ZenTra Working Papers in Transnational Studies 32 / 2014, ZenTra - Center for Transnational Studies, revised Jan 2014.
  7. Michael Jakob & Gunnar Luderer & Jan Steckel & Massimo Tavoni & Stephanie Monjon, 2012. "Time to act now? Assessing the costs of delaying climate measures and benefits of early action," Climatic Change, Springer, vol. 114(1), pages 79-99, September.
  8. Michael Jakob & Kai Lessmann, 2012. "Signaling in international environmental agreements: the case of early and delayed action," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 12(4), pages 309-325, November.
  9. Robert Hahn & Robert Ritz, 2014. "Optimal Altruism in Public Good Provision," Cambridge Working Papers in Economics 1403, Faculty of Economics, University of Cambridge.
  10. Olivier Bos & Béatrice Roussillon & Paul Schweinzer, 2013. "Agreeing on Efficient Emissions Reduction," CESifo Working Paper Series 4345, CESifo Group Munich.

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