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Climate Change and Game Theory

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  • Wood, Peter John

Abstract

This survey paper examines the problem of achieving global cooperation to reduce greenhouse gas emissions. Contributions to this problem are reviewed from non-cooperative game theory, cooperative game theory, and implementation theory. Solutions to games where players have a continuous choice about how much to pollute, games where players make decisions about treaty participation, and games where players make decisions about treaty ratification, are examined. The implications of linking cooperation on climate change with cooperation on other issues, such as trade, is examined. Cooperative and non-cooperative approaches to coalition formation are investigated in order to examine the behaviour of coalitions cooperating on climate change. One way to achieve cooperation is to design a game, known as a mechanism, whose equilibrium corresponds to an optimal outcome. This paper examines some mechanisms that are based on conditional commitments, and could lead to substantial cooperation.

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Bibliographic Info

Paper provided by Australian National University, Environmental Economics Research Hub in its series Research Reports with number 95061.

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Date of creation: May 2010
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Handle: RePEc:ags:eerhrr:95061

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Keywords: Climate change negotiations; game theory; implementation theory; coalition formation; subgame perfect equilibrium; Environmental Economics and Policy;

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  1. Geoffroy de Clippel & Roberto Serrano, 2008. "Bargaining, coalitions and externalities: A comment on Maskin," Working Papers 2008-11, Instituto Madrile├▒o de Estudios Avanzados (IMDEA) Ciencias Sociales.
  2. Ray, D. & Vohra, R., 1993. "Equilibrium Binding Agreements," Papers 21, Boston University - Department of Economics.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. EERH Research Reports: July 2010
    by David Stern in Stochastic Trend on 2010-08-06 06:32:00
  2. EERH Research Reports: June 2010
    by David Stern in Stochastic Trend on 2010-07-03 10:06:00
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Cited by:
  1. David I. Stern & Frank Jotzo & Leo Dobes, 2013. "The Economics of Global Climate Change: A Historical Literature Review," CCEP Working Papers 1307, Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University.
  2. Keswani Mehra, Meeta & Mukherjee, Saptarshi & Dutta, Monica, 2012. "Toward a framework for implementation of climate change treaty through self-enforcing mechanisms," MPRA Paper 36286, University Library of Munich, Germany.
  3. Mei├čner, Nathalie, 2013. "The incentives of private companies to invest in protected area certificates: How coalitions can improve ecosystem sustainability," Ecological Economics, Elsevier, vol. 95(C), pages 148-158.
  4. Jin Zhugang & Can Wang & Wenjia Cai, 2013. "Cooperation is essential for 2 centigrade degrees Target: a new perspective from the Dynamic Game Model," Review of Applied Socio-Economic Research, Pro Global Science Association, vol. 5(1), pages 100-105, June.

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