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Inequality, communication and the avoidance of disastrous climate change

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  • Tavoni, Alessandro
  • Dannenberg, Astrid
  • Kallis, Giorgos
  • Löschel, Andreas

Abstract

International efforts to provide global public goods often face the challenges of coordinating national contributions and distributing costs equitably in the face of uncertainty, inequality, and free-riding incentives. In an experimental setting, we distribute endowments unequally among a group of people who can reach a fixed target sum through successive money contributions, knowing that if they fail they will lose all their remaining money with 50% probability. We find that inequality reduces the prospects of reaching the target, but that communication increases success dramatically. Successful groups tend to eliminate inequality over the course of the game, with rich players signalling willingness to redistribute early on. Our results suggest that coordinative institutions and early redistribution from richer to poorer nations may widen our window of opportunity to avoid global climate calamity.

Suggested Citation

  • Tavoni, Alessandro & Dannenberg, Astrid & Kallis, Giorgos & Löschel, Andreas, 2011. "Inequality, communication and the avoidance of disastrous climate change," LSE Research Online Documents on Economics 37570, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:37570
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    References listed on IDEAS

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    1. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 817-868.
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    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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