A unifying theory of foreign intervention in domestic climate policy

We propose a theory of climate-policy foreign intervention in which the climate policy is characterized in a policy externality space spanned by differences between two countries exposure to foreign policy, exposure divergence, and in preferred policy levels, preference asymmetry. Within this framework, we show that strategic behavior such as free-riding and free-driving emerge as equilibrium outcomes of position in this policy externality space, rather than as intrinsic features of a climate policy technology, such as mitigation, adaptation, or geoengineering. We also examine preferences for foreign intervention when a hegemon has three options to intervene in the domestic climate policy of a potential Target: i.) Agreements with Extraction; ii.) Agreements with Rewards; and iii.) Agreements with Sanctions. The hegemon’s choice is determined by the availability of rents that can be extracted from the target country, which is, in turn, a function of the policy externality. This explains why the same technology may require different governance approaches in different contexts and why some climate policies attract foreign intervention while others do not.