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Bargaining over a climate deal: deadline and delay

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  • Pierre Courtois

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  • Tarik Tazdaït

    ()

Abstract

Assuming that a North-South transfer is the key to effective climate cooperation, we ask when and how much the North should offer to the South in return for a commitment to reduce deforestation and forest degradation. In light of the risk of irreversible damage over time, we examine a negotiation with a deadline. In this case, the North threatens the South over a negotiation dead-end in case an agreement is not reached rapidly. We assess the conditions for an agreement to be immediate or delayed, and discuss those situations likely to result in negotiation failure. Despite the risk of irreversible damage over time, we show that cooperation is likely to be delayed and we identify situations wherein the North and South do not reach an agreement within the deadline. Although Pareto-improving, cooperation may collapse because of inefficiencies related to incomplete information. What’s more, we show that in negotiations with a deadline, uncertainty about the benefits deriving from cooperation and the irreversibility of the damage that will be caused if cooperation is delayed are the two key components affecting choice. Copyright Springer Science+Business Media, LLC 2014

Suggested Citation

  • Pierre Courtois & Tarik Tazdaït, 2014. "Bargaining over a climate deal: deadline and delay," Annals of Operations Research, Springer, vol. 220(1), pages 205-221, September.
  • Handle: RePEc:spr:annopr:v:220:y:2014:i:1:p:205-221:10.1007/s10479-011-1018-9
    DOI: 10.1007/s10479-011-1018-9
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    References listed on IDEAS

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    Cited by:

    1. Alejandro Caparrós, 2016. "Bargaining and International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(1), pages 5-31, September.
    2. repec:spr:ieaple:v:17:y:2017:i:5:d:10.1007_s10784-017-9351-3 is not listed on IDEAS
    3. Kai A. Konrad & Marcel Thum, 2018. "Does a Clean Development Mechanism Facilitate International Environmental Agreements?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(4), pages 837-851, April.
    4. Basak Bayramoglu & Jean-François Jacques, 2015. "International Environmental Agreements: The Case of Costly Monetary Transfers," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(4), pages 745-767, December.

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