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A simple dynamic climate cooperation model

Author

Listed:
  • Robert C. Schmidt

    () (Humboldt-Universitaet zu Berlin)

  • Eugen Kovac

    () (University of Duisburg-Essen)

Abstract

A standard result from the game theoretic literature on international environmental agreements is that coalitions are either `broad but shallow' or `narrow but deep'. Hence, the stable coalition size is small when the potential welfare gains are large. We modify a standard climate coalition game by adding a { seemingly { small but realistic feature: we allow countries to delay climate negotiations until the next 'round' if a coalition forms but decides to remain inactive. It turns out that results are surprisingly different under this modfication. In particular, a large coalition with deep emissions cuts forms if countries are sufficiently patient. Our results also indicate that countries should try hard to overcome coordination problems in the formation of a coalition. A more cooperative outcome may then be reached, and it may be reached more quickly.

Suggested Citation

  • Robert C. Schmidt & Eugen Kovac, 2015. "A simple dynamic climate cooperation model," Working Papers 2015017, Berlin Doctoral Program in Economics and Management Science (BDPEMS).
  • Handle: RePEc:bdp:wpaper:2015017
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    References listed on IDEAS

    as
    1. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-894, Supplemen.
    2. Michael Hoel & Kerstin Schneider, 1997. "Incentives to participate in an international environmental agreement," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 9(2), pages 153-170, March.
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    Cited by:

    1. Hiroaki SAKAMOTO & Larry KARP, 2019. "Sober optimism and the formation of international environmental agreements," Discussion papers e-19-002, Graduate School of Economics , Kyoto University.
    2. Larry Karp & Hiroaki Sakamoto, 2018. "International environmental agreements without commitment," 2018 Meeting Papers 508, Society for Economic Dynamics.

    More about this item

    Keywords

    climate treaty; coalition; dynamic game; coordination; delay;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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