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Regional initiatives and the cost of delaying binding climate change agreements

  • Beccherle, Julien
  • Tirole, Jean

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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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
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505578

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