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Climate Change and Game Theory: A Mathematical Survey

Author

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  • Peter J. Wood

    (Resource Management in Asia-Pacific Program, Crawford School of Public Policy, The Australian National University)

Abstract

This paper examines the problem of achieving global cooperation to reduce greenhouse gas emissions. Contributions to this problem are reviewed from noncooperative game theory, cooperative game theory, and implementation theory. We examine the solutions to games where players have a continuous choice about how much to pollute, and games where players make decisions about treaty participation. The implications of linking cooperation on climate change with cooperation on other issues, such as trade, is also examined. Cooperative and non-cooperative approaches to coalition formation are investigated in order to examine the behaviour of coalitions cooperating on climate change. One way to achieve cooperation is to design a game, known as a mechanism, whose equilibrium corresponds to an optimal outcome. This paper examines some mechanisms that are based on conditional commitments, and their policy implications. These mechanisms could make cooperation on climate change mitigation more likely.

Suggested Citation

  • Peter J. Wood, 2010. "Climate Change and Game Theory: A Mathematical Survey," CCEP Working Papers 0210, Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:ccepwp:0210
    as

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    File URL: http://ccep.anu.edu.au/data/2010/pdf/wpaper/CCEP-2-10.pdf
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    References listed on IDEAS

    as
    1. Aldy,Joseph E. & Stavins,Robert N. (ed.), 2007. "Architectures for Agreement," Cambridge Books, Cambridge University Press, number 9780521871631.
    2. Geoffroy de Clippel & Roberto Serrano, 2008. "Bargaining, Coalitions and Externalities: a Comment on Maskin," Working Papers 2008-16, Brown University, Department of Economics.
    3. Aldy,Joseph E. & Stavins,Robert N. (ed.), 2007. "Architectures for Agreement," Cambridge Books, Cambridge University Press, number 9780521692175.
    4. Steven J. Brams & D. Marc Kilgour, 2009. "How Democracy Resolves Conflict in Difficult Games," Springer Series in Game Theory, in: Simon A. Levin (ed.), Games, Groups, and the Global Good, pages 229-241, Springer.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

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    2. Alessio Carrozzo Magli & Pompeo Della Posta & Piero Manfredi, 2021. "The Tragedy of the Commons as a Prisoner’s Dilemma. Its Relevance for Sustainability Games," Sustainability, MDPI, vol. 13(15), pages 1-10, July.
    3. Kennedy, Matthew & Basu, Biswajit, 2014. "An analysis of the climate change architecture," Renewable and Sustainable Energy Reviews, Elsevier, vol. 34(C), pages 185-193.
    4. Meißner, Nathalie, 2013. "The incentives of private companies to invest in protected area certificates: How coalitions can improve ecosystem sustainability," Ecological Economics, Elsevier, vol. 95(C), pages 148-158.
    5. 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.
    6. Malerba, Daniele, 2020. "Poverty alleviation and local environmental degradation: An empirical analysis in Colombia," World Development, Elsevier, vol. 127(C).

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    Keywords

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    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

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