Trade Sanctions, Financial Transfers and BRIC's Participation in Global Climate Change Negotiations
Countries can reduce global emissions by reducing own consumption since they are linked to the total value of consumption world wide. Two effects are at issue: a utility loss from forgone consumption and a utility gain from lowered temperature change. It is thus unclear whether own country emissions reductions are in the self interest; typically they are not for small countries, but may be for larger countries. Here are investigate the incentives for individual large population low wage rapidly growing countries in the BRIC group (Brazil, Russia, India, China) and the groups of countries as a sub-global coalition. We also assess what level of other countries’ trade measures linked to non participation is needed to induce compliance as an all or nothing discrete choice. We capture induced changes in the global trade equilibrium in our analysis, as well as participation linked to financial transfers. Our results suggest that only very high tariffs over a hundred percent by all other countries, or even higher tariffs by the OECD alone, could induce participation by BRIC countries, especially when the country is a net exporter. Equally, large financial transfers would be needed.
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