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

Author

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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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Suggested Citation

  • 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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    Cited by:

    1. Laurence Kotlikoff & Felix Kubler & Andrey Polbin & Jeffrey Sachs & Simon Scheidegger, 2021. "Making Carbon Taxation A Generational Win Win," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 62(1), pages 3-46, February.
    2. Lessmann, Kai & Kornek, Ulrike & Dellink, Rob & Emmerling, Johannes & Eyckmans, Johan & Nagashima, Miyuki & Weikard, Hans-Peter & Yang, Zili, 2014. "The Stability and Effectiveness of Climate Coalitions: A Comparative Analysis of Multiple Integrated Assessment Models," Climate Change and Sustainable Development 163598, Fondazione Eni Enrico Mattei (FEEM).
    3. Ingmar Schumacher, 2014. "The Aggregation Dilemma," Working Papers 2014-224, Department of Research, Ipag Business School.
    4. Henry Tulkens, 2016. "COP 21 and Economic Theory: Taking Stock," Revue d'économie politique, Dalloz, vol. 126(4), pages 471-486.
    5. Bosetti, Valentina & Carraro, Carlo & De Cian, Enrica & Massetti, Emanuele & Tavoni, Massimo, 2013. "Incentives and stability of international climate coalitions: An integrated assessment," Energy Policy, Elsevier, vol. 55(C), pages 44-56.
    6. Thierry Bréchet & Carmen Camacho & Vladimir Veliov, 2014. "Model predictive control, the economy, and the issue of global warming," Annals of Operations Research, Springer, vol. 220(1), pages 25-48, September.
    7. Jan Kersting & Vicki Duscha & Matthias Weitzel, 2017. "Cooperation on Climate Change under Economic Linkages: How the Inclusion of Macroeconomic Effects Affects Stability of a Global Climate Coalition," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    8. Kai Lessmann & Ulrike Kornek & Valentina Bosetti & Rob Dellink & Johannes Emmerling & Johan Eyckmans & Miyuki Nagashima & Hans-Peter Weikard & Zili Yang, 2015. "The Stability and Effectiveness of Climate Coalitions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(4), pages 811-836, December.
    9. Karp, Larry & Sakamoto, Hiroaki, 2021. "Sober optimism and the formation of international environmental agreements," Journal of Economic Theory, Elsevier, vol. 197(C).
    10. BRECHET, Thierry & THENIE, Julien & ZEIMES, Thibaut & ZUBER, Stéphane, 2010. "The benefits of cooperation under uncertainty: the case of climate change," LIDAM Discussion Papers CORE 2010062, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    11. repec:rnp:ecopol:s2101 is not listed on IDEAS
    12. Tulkens, Henry, 2016. "COP 21 and Economic Theory: Taking Stock," ET: Economic Theory 236237, Fondazione Eni Enrico Mattei (FEEM).
    13. Thierry Brechet & Henry Tulkens, 2015. "Climate Policies: A Burden, or a Gain?," The Energy Journal, , vol. 36(3), pages 155-170, July.
    14. Jing Wu & Jean-Claude Thill, 2018. "Climate change coalition formation and equilibrium strategies in mitigation games in the post-Kyoto Era," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 18(4), pages 573-598, August.
    15. Ulrike Kornek & Jan Christoph Steckel & Kai Lessmann & Ottmar Edenhofer, 2017. "The climate rent curse: new challenges for burden sharing," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 17(6), pages 855-882, December.
    16. Jasper N. Meya & Ulrike Kornek & Kai Lessmann, 2018. "How empirical uncertainties influence the stability of climate coalitions," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 18(2), pages 175-198, April.
    17. Raouf Boucekkine & Carmen Camacho & Weihua Ruan & Benteng Zou, 2024. "How Do Coalitions Break Down? An Alternative View," Dynamic Games and Applications, Springer, vol. 14(1), pages 157-194, March.
    18. Piergiuseppe Pezzoli & Johannes Emmerling & Massimo Tavoni, 2023. "SRM on the table: the role of geoengineering for the stability and effectiveness of climate coalitions," Climatic Change, Springer, vol. 176(10), pages 1-21, October.
    19. Raouf Boucekkine & Carmen Camacho & Weihua Ruan & Benteng Zou, 2022. "Optimal coalition splitting with heterogenous strategies," Working Papers halshs-03770401, HAL.
    20. Thomas Kuhn & Radomir Pestow & Anja Zenker, 2019. "Building Climate Coalitions on Preferential Free Trade Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(2), pages 539-569, October.
    21. Raouf Boucekkine & Carmen Camacho & Weihua Ruan & Benteng Zou, 2022. "Why and when coalitions split? An alternative analytical approach with an application to environmental agreements," Working Papers halshs-03676670, HAL.
    22. Holladay, J. Scott & Livermore, Michael A., 2013. "Regional variation, holdouts, and climate treaty negotiations," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 4(2), pages 131-157, August.
    23. Laurence J. Kotlikoff & Andrey Polbin & Andrey Zubarev, 2016. "Will the Paris Accord Accelerate Climate Change?," NBER Working Papers 22731, National Bureau of Economic Research, Inc.
    24. BUCKLE, Simon & MUÛLS, Mirabelle & LEIB, Joerg & BRECHET, Thierry, 2014. "Prospects for Paris 2015: do major emitters want the same climate ?," LIDAM Discussion Papers CORE 2014008, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    25. Christoph Weissbart, 2018. "Decarbonization of Power Markets under Stability and Fairness: Do They Influence Efficiency?," ifo Working Paper Series 270, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.

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    JEL classification:

    • F0 - International Economics - - General

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