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Efficiency vs. stability in climate coalitions: a conceptual and computational appraisal

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  • BRECHET, Thierry
  • GERARD, François
  • TULKENS, Henry

Abstract

This paper evaluates with numerical computations the respective merits of two competing notions of coalition stability in the standard global public goods model of climate change. To this effect it uses the CWS integrated assessment model. After a reminder of the two game theoretical stability notions involved--core-stability and internal-external stability--and of the CWS model, the former property is shown to hold for the grand coalition if resource transfers of a specific form between countries are introduced. The latter property appears to hold neither for the grand coalition nor for most large coalitions whereas it is verified for most small coalitions in a weak sense that involves transfers. Finally, coalitions, stable in either sense, that perform best in terms of carbon concentration and global welfare are always heterogeneous ones. Therefore, if coalitional stability is taken as an objective, promoting small or homogeneous coalitions is not to be recommended.
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  • BRECHET, Thierry & GERARD, François & TULKENS, Henry, 2011. "Efficiency vs. stability in climate coalitions: a conceptual and computational appraisal," LIDAM Reprints CORE 2276, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:2276
    DOI: 10.5547/ISSN0195-6574-EJ-Vol32-No1-3
    Note: In : The Energy Journal, 32(1), 49-75, 2011
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    References listed on IDEAS

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    1. Asheim, Geir B. & Froyn, Camilla Bretteville & Hovi, Jon & Menz, Fredric C., 2006. "Regional versus global cooperation for climate control," Journal of Environmental Economics and Management, Elsevier, vol. 51(1), pages 93-109, January.
    2. Parkash Chander & Henry Tulkens, 2006. "The Core of an Economy with Multilateral Environmental Externalities," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 153-175, Springer.
    3. Bréchet, Thierry & Gerard, Francois & Tulkens, Henry, 2007. "Climate Coalitions: A Theoretical and Computational Appraisal," Coalition Theory Network Working Papers 10270, Fondazione Eni Enrico Mattei (FEEM).
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    6. Thierry Bréchet & Johan Eyckmans & François Gerard & Philippe Marbaix & Henry Tulkens & Jean-Pascal Van Ypersele, 2010. "The impact of the unilateral EU commitment on the stability of international climate agreements," Climate Policy, Taylor & Francis Journals, vol. 10(2), pages 148-166, March.
    7. Parkash Chandler & Henry Tulkens & Jean-Pascal Ypersele & Stephane Willems, 2006. "The Kyoto Protocol: An Economic and Game Theoretic Interpretation," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 195-215, Springer.
    8. Parkash Chander & Henry Tulkens, 2006. "A Core-Theoretic Solution for the Design of Cooperative Agreements on Transfrontier Pollution," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 176-193, Springer.
    9. Bernard, A. & Haurie, A. & Vielle, M. & Viguier, L., 2008. "A two-level dynamic game of carbon emission trading between Russia, China, and Annex B countries," Journal of Economic Dynamics and Control, Elsevier, vol. 32(6), pages 1830-1856, June.
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