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The impact of the unilateral EU commitment on the stability of international climate agreements

Author

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  • Thierry, BRECHET

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE))

  • Francois, GERARD

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE))

  • Henry, TULKENS

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE))

  • Jean-Pascal, VAN YPERSELE

Abstract

In this paper we analyze the negotiation strategy of the European Union regarding the formation of an international climate agreement for the post-2012 era. We use game theoretical stability concepts to explore incentives for key players in the climate policy game to join future climate agreements. We compare a minus 20 percent unilateral commitment strategy by the EU with a unilateral minus 30 percent emission reduction strategy for all Annex-B countries. Using a numerical integrated assessment climate-economy simulation model, we find that carbon leakage effects are negligible. Ther EU strategy to reduce emissions by 30% (compared to 1990 levels) by 2020 if other Annex-B countries follow does not induce participation of the USA with a similar 30% reduction commitement. However, the model shows that an appropriate initial allocation of emission allowances may stabilize a larger and more ambitious climate coalition than the Kyoto Protocol in its first commitment period.

Suggested Citation

  • Thierry, BRECHET & Francois, GERARD & Henry, TULKENS & Jean-Pascal, VAN YPERSELE, 2008. "The impact of the unilateral EU commitment on the stability of international climate agreements," Discussion Papers (ECON - Département des Sciences Economiques) 2008038, Université catholique de Louvain, Département des Sciences Economiques.
  • Handle: RePEc:ctl:louvec:2008038
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    Cited by:

    1. Thierry Brechet and Henry Tulkens, 2015. "Climate Policies: A Burden, or a Gain?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    2. Vicki Duscha & Joachim Schleich, 2013. "Can no-lose targets contribute to a 2°C target?," Climate Policy, Taylor & Francis Journals, pages 305-327.
    3. Gregor Schwerhoff, 2013. "Leadership and International Climate Cooperation," Working Papers 2013.97, Fondazione Eni Enrico Mattei.
    4. BRECHET, Thierry & THENIE, Julien & ZEIMES, Thibaut & ZUBER, Stéphane, 2010. "The benefits of cooperation under uncertainty: the case of climate change," CORE Discussion Papers 2010062, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Luisito Bertinelli & Amer Tabakovic & Luca Marchiori & Benteng Zou, 2015. "Transboundary Pollution Abatement: The Impact of Unilateral Commitment in Differential Games," CREA Discussion Paper Series 15-02, Center for Research in Economic Analysis, University of Luxembourg.

    More about this item

    Keywords

    Climate change; Coalition theory; Integrated assessment model; Kyoto protocol;

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • H4 - Public Economics - - Publicly Provided Goods
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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