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Efficiency vs. Stability in Climate Coalitions: A Conceptual and Computational Appraisal

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  • Thierry Bréchet
  • François Gerard
  • Henry Tulkens

Abstract

This paper evaluates with numerical computations the respective merits of two competing notions of coalition stability in the standard global public goods model of climate change. To this effect it uses the CWS integrated assessment model. After a reminder of the two game theoretical stability notions involved--core-stability and internal-external stability--and of the CWS model, the former property is shown to hold for the grand coalition if resource transfers of a specific form between countries are introduced. The latter property appears to hold neither for the grand coalition nor for most large coalitions whereas it is verified for most small coalitions in a weak sense that involves transfers. Finally, coalitions, stable in either sense, that perform best in terms of carbon concentration and global welfare are always heterogeneous ones. Therefore, if coalitional stability is taken as an objective, promoting small or homogeneous coalitions is not to be recommended.

Suggested Citation

  • Thierry Bréchet & François Gerard & Henry Tulkens, 2011. "Efficiency vs. Stability in Climate Coalitions: A Conceptual and Computational Appraisal," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 49-76.
  • Handle: RePEc:aen:journl:2011v32-01-a03
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    References listed on IDEAS

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    1. Asheim, Geir B. & Froyn, Camilla Bretteville & Hovi, Jon & Menz, Fredric C., 2006. "Regional versus global cooperation for climate control," Journal of Environmental Economics and Management, Elsevier, vol. 51(1), pages 93-109, January.
    2. Bernard, A. & Haurie, A. & Vielle, M. & Viguier, L., 2008. "A two-level dynamic game of carbon emission trading between Russia, China, and Annex B countries," Journal of Economic Dynamics and Control, Elsevier, vol. 32(6), pages 1830-1856, June.
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    Cited by:

    1. Henry Tulkens, 2016. "COP 21 and Economic Theory: Taking Stock," CESifo Working Paper Series 5918, CESifo Group Munich.
    2. Thierry Brechet and Henry Tulkens, 2015. "Climate Policies: A Burden, or a Gain?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    3. Tulkens, Henry, 2016. "COP 21 and Economic Theory: Taking Stock," ET: Economic Theory 236237, Fondazione Eni Enrico Mattei (FEEM).
    4. Laurence J. Kotlikoff & Andrey Polbin & Andrey Zubarev, 2016. "Will the Paris Accord Accelerate Climate Change?," NBER Working Papers 22731, National Bureau of Economic Research, Inc.
    5. Henry Tulkens, 2016. "COP 21 and Economic Theory: Taking Stock," Working Papers 2016.40, Fondazione Eni Enrico Mattei.
    6. Bosetti, Valentina & Carraro, Carlo & De Cian, Enrica & Massetti, Emanuele & Tavoni, Massimo, 2013. "Incentives and stability of international climate coalitions: An integrated assessment," Energy Policy, Elsevier, vol. 55(C), pages 44-56.
    7. repec:spr:ieaple:v:17:y:2017:i:6:d:10.1007_s10784-017-9352-2 is not listed on IDEAS
    8. BUCKLE, Simon & MUÛLS, Mirabelle & LEIB, Joerg & BRECHET, Thierry, 2014. "Prospects for Paris 2015: do major emitters want the same climate ?," CORE Discussion Papers 2014008, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    9. KORNEK, Urik & LESSMANN, Kai & TULKENS, Henry, 2014. "Transferable and non transferable utility implementations of coalitional stability in integrated assessment models," CORE Discussion Papers 2014035, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    10. Holladay J. Scott & Livermore Michael A., 2013. "Regional variation, holdouts, and climate treaty negotiations," Journal of Benefit-Cost Analysis, De Gruyter, vol. 4(2), pages 131-157, August.
    11. repec:eee:ecolec:v:144:y:2018:i:c:p:27-35 is not listed on IDEAS

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    JEL classification:

    • F0 - International Economics - - General

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