The Simple Analytics of Carbon

This paper analyzes atmospheric carbon accumulation in a simple non-cooperative game model with two sets of participants: developed countries and less-developed countries (LDCs). Both sets are shown to contribute to global warming through different combinations of activities. Developed countries primarily add carbon through the burning of fossil fuels and CFC emissions, while the LDCs add through deforestation, animal wastes, agriculture, and burning fossil fuels. Unlike earlier papers, our game representation stresses joint productys of a nationspecific and global variety. The following issues are explored: (1) the desirability of unilateral action; (2) the efficacy of treaties among a subset of nations; (3) the effectiveness of income redistribution policies between coalitions; and (4) the.self-enforceability of agreements. In the joint product scenario, some of our results are more hopeful and differ from anything in the literature.