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Cooperation and Competition in Climate Change Policies: Mitigation and Climate Engineering when Countries are Asymmetric

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  • Manoussi, Vassiliki
  • Xepapadeas, Anastasios

Abstract

We study a dynamic game of climate policy design in terms of emissions and solar radiation management (SRM) involving two heterogeneous regions or countries. Countries emit greenhouse gasses (GHGs), and can block incoming radiation by unilateral SRM activities, thus reducing global temperature. Heterogeneity is modelled in terms of the social cost of SRM, the environmental damages due to global warming, the productivity of emissions in terms of generating private benefits, the rate of impatience, and the private cost of geoengineering. We determine the impact of asymmetry on mitigation and SRM activities, concentration of GHGs, and global temperature, and we examine whether a trade-off actually emerges between mitigation and SRM. Our results could provide some insights into a currently emerging debate regarding mitigation and SRM methods to control climate change, especially since asymmetries seem to play an important role in affecting incentives for cooperation or unilateral actions.

Suggested Citation

  • Manoussi, Vassiliki & Xepapadeas, Anastasios, 2014. "Cooperation and Competition in Climate Change Policies: Mitigation and Climate Engineering when Countries are Asymmetric," Climate Change and Sustainable Development 190930, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemcl:190930
    DOI: 10.22004/ag.econ.190930
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    References listed on IDEAS

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    1. List, John A. & Mason, Charles F., 2001. "Optimal Institutional Arrangements for Transboundary Pollutants in a Second-Best World: Evidence from a Differential Game with Asymmetric Players," Journal of Environmental Economics and Management, Elsevier, vol. 42(3), pages 277-296, November.
    2. Emmerling, Johannes & Tavoni, Massimo, 2013. "Geoengineering and Abatement: A “flat” Relationship under Uncertainty," Climate Change and Sustainable Development 148917, Fondazione Eni Enrico Mattei (FEEM).
    3. Juan Moreno-Cruz & David Keith, 2013. "Climate policy under uncertainty: a case for solar geoengineering," Climatic Change, Springer, vol. 121(3), pages 431-444, December.
    4. Vasiliki Manousi & Anastasios Xepapadeas, 2013. "Mitigation and Solar Radiation Management in Climate Change Policies," Working Papers 2013.41, Fondazione Eni Enrico Mattei.
    5. Brock, William & Engström, Gustav & Xepapadeas, Anastasios, 2014. "Spatial climate-economic models in the design of optimal climate policies across locations," European Economic Review, Elsevier, vol. 69(C), pages 78-103.
    6. Scott Barrett, 2008. "The Incredible Economics of Geoengineering," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 39(1), pages 45-54, January.
    7. Moreno-Cruz, Juan B., 2015. "Mitigation and the geoengineering threat," Resource and Energy Economics, Elsevier, vol. 41(C), pages 248-263.
    8. Dockner Engelbert J. & Van Long Ngo, 1993. "International Pollution Control: Cooperative versus Noncooperative Strategies," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 13-29, July.
    9. Brock, William A. & Engström, Gustav & Grass, Dieter & Xepapadeas, Anastasios, 2013. "Energy balance climate models and general equilibrium optimal mitigation policies," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2371-2396.
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    Cited by:

    1. Louis-Gaëtan Giraudet & Céline Guivarch, 2018. "Asymmetric impacts and over-provision of public goods," CIRED Working Papers hal-01960318, HAL.
    2. Johannes Emmerling & Vassiliki Manoussi & Anastasios Xepapadeas, 2016. "Climate Engineering under Deep Uncertainty and Heterogeneity," Working Papers 2016.52, Fondazione Eni Enrico Mattei.
    3. Heyen, Daniel, 2016. "Strategic conflicts on the horizon: R&D incentives for environmental technologies," LSE Research Online Documents on Economics 68104, London School of Economics and Political Science, LSE Library.
    4. repec:awi:wpaper:0584 is not listed on IDEAS
    5. Heyen, Daniel & Horton, Joshua & Moreno-Cruz, Juan, 2019. "Strategic implications of counter-geoengineering: Clash or cooperation?," Journal of Environmental Economics and Management, Elsevier, vol. 95(C), pages 153-177.
    6. Manoussi, Vassiliki & Xepapadeas, Anastasios & Emmerling, Johannes, 2018. "Climate engineering under deep uncertainty," Journal of Economic Dynamics and Control, Elsevier, vol. 94(C), pages 207-224.
    7. Daniel Heyen, 2016. "Strategic Conflicts On The Horizon: R&D Incentives For Environmental Technologies," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 7(04), pages 1-27, November.
    8. Emmerling, Johannes & Tavoni, Massimo, 2017. "Quantifying Non-cooperative Climate Engineering," MITP: Mitigation, Innovation and Transformation Pathways 266289, Fondazione Eni Enrico Mattei (FEEM).
    9. Anastasios Xepapadeas & Athanasios Yannacopoulos, 2018. "Spatially Structured Deep Uncertainty, Robust Control, and Climate Change Policies," DEOS Working Papers 1807, Athens University of Economics and Business.

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    More about this item

    Keywords

    Environmental Economics and Policy;

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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