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Uncertainty and climate treaties: Does ignorance pay?

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  • Dellink, Rob
  • Finus, Michael

Abstract

Uncertainty and learning play an important role in the management of many environmental and resource problems and in particular in climate change. In stylized game-theoretic models of international environmental treaty formation, which capture the strategic interactions between nations, learning usually has a negative impact on the success of cooperation. We use a richer climate model that captures the large heterogeneity between different world regions and considers uncertainty about the benefits and costs from climate mitigation. By explicitly exploiting differences between regions and allowing transfers to mitigate free-rider incentives, we derive much more positive conclusions about the role of learning.

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Bibliographic Info

Article provided by Elsevier in its journal Resource and Energy Economics.

Volume (Year): 34 (2012)
Issue (Month): 4 ()
Pages: 565-584

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Handle: RePEc:eee:resene:v:34:y:2012:i:4:p:565-584

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Web page: http://www.elsevier.com/locate/inca/505569

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Keywords: International climate agreements; Uncertainty; Learning; Information effect; Strategic effect; Stability effect;

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References

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Citations

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Cited by:
  1. Michael Finus & Pedro Pintassilgo & Alistair Ulph, 2014. "International Environmental Agreements with Uncertainty, Learning and Risk Aversion," CESifo Working Paper Series 4589, CESifo Group Munich.
  2. Thijs Dekker & Rob Dellink & Janina Ketterer, 2013. "The Fatter the Tail, the Fatter the Climate Agreement - Simulating the Influence of Fat Tails in Climate Change Damages on the Success of International Climate Negotiations," CESifo Working Paper Series 4059, CESifo Group Munich.
  3. Agbo, Maxime, 2014. "Strategic exploitation with learning and heterogeneous beliefs," Journal of Environmental Economics and Management, Elsevier, vol. 67(2), pages 126-140.

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