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Climate Clubs Versus Single Coalitions: The Ambition Of International Environmental Agreements

Author

Listed:
  • ACHIM HAGEN

    (Resource Economics Group, Humboldt-Universit├Ąt zu Berlin, Unter den Linden 6, 10099 Berlin, Germany)

  • KLAUS EISENACK

    (Resource Economics Group, Humboldt-Universit├Ąt zu Berlin, Unter den Linden 6, 10099 Berlin, Germany)

Abstract

We investigate whether global cooperation on emissions abatement can be improved if asymmetric countries agree to sign one out of several environmental agreements. The analysis is based on a two-stage game theoretical model. Conditions for stable coalitions and the resulting global emissions are determined. We allow for multiple coalitions with all countries being different, and analyze the effects in the cases of increasing marginal damages from emissions and of decreasing marginal benefits of emissions. We find that in the case of decreasing marginal benefits and constant marginal damages, admitting multiple coalitions increases the number of cooperating countries and reduces emissions (compared to the standard case with a single coalition). For increasing marginal damages and constant marginal benefits, however, multiple stable coalitions cannot coexist. If both damages and benefits are nonlinear, admitting multiple coalitions can decrease emissions. The paper thus contributes to the emerging discussion on the scope and limits of climate clubs.

Suggested Citation

  • Achim Hagen & Klaus Eisenack, 2019. "Climate Clubs Versus Single Coalitions: The Ambition Of International Environmental Agreements," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 10(03), pages 1-19, August.
  • Handle: RePEc:wsi:ccexxx:v:10:y:2019:i:03:n:s2010007819500118
    DOI: 10.1142/S2010007819500118
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