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Incentives and Stability of International Climate Coalitions: An Integrated Assessment

Author

Listed:
  • Valentina Bosetti

    (Fondazione Eni Enrico Mattei and CMCC)

  • Carlo Carraro

    (Fondazione Eni Enrico Mattei, University of Venice, CEPR, CESifo and CMCC)

  • Enrica De Cian

    (Fondazione Eni Enrico Mattei and CMCC)

  • Emanuele Massetti

    (Fondazione Eni Enrico Mattei and CMCC)

  • Massimo Tavoni

    (Fondazione Eni Enrico Mattei and CMCC)

Abstract

This paper analyses the incentives to participate in and the stability of international climate coalitions. Using the integrated assessment model WITCH, the analysis of coalitions’ profitability and stability is performed under alternative assumptions concerning the pure rate of time preference, the social welfare aggregator and the extent of climate damages. We focus on the profitability, stability, and “potential stability” of a number of coalitions which are “potentially effective” in reducing emissions. We find that only the grand coalition under a specific sets of assumptions finds it optimal to stabilise GHG concentration below 550 ppm CO2-eq. However, the grand coalition is found not to be stable, not even “potentially stable” even through an adequate set of transfers. However, there exist potentially stable coalitions, but of smaller size, which are also potentially environmentally effective. Depending on the assumptions made, they could achieve up to 600 ppm CO2-eq. More ambitious targets lead to the collapse of the coalition.

Suggested Citation

  • Valentina Bosetti & Carlo Carraro & Enrica De Cian & Emanuele Massetti & Massimo Tavoni, 2011. "Incentives and Stability of International Climate Coalitions: An Integrated Assessment," Working Papers 2011.97, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2011.97
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    References listed on IDEAS

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    Cited by:

    1. repec:wsi:ccexxx:v:02:y:2011:i:04:n:s2010007811000346 is not listed on IDEAS
    2. Carlo Carraro, 2014. "International environmental cooperation," Chapters,in: Handbook of Sustainable Development, chapter 26, pages 418-431 Edward Elgar Publishing.
    3. repec:spr:ieaple:v:18:y:2018:i:2:d:10.1007_s10784-017-9378-5 is not listed on IDEAS
    4. Venkatachalam ANBUMOZHI, 2015. "Low Carbon Green Growth in Asia: What is the Scope for Regional Cooperation?," Working Papers DP-2015-29, Economic Research Institute for ASEAN and East Asia (ERIA).
    5. Milan Ščasný & Emanuele Massetti & Jan Melichar & Samuel Carrara, 2015. "Quantifying the Ancillary Benefits of the Representative Concentration Pathways on Air Quality in Europe," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(2), pages 383-415, October.
    6. 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).
    7. Olivier Bos & Béatrice Roussillon & Paul Schweinzer, 2016. "Agreeing on Efficient Emissions Reduction," Scandinavian Journal of Economics, Wiley Blackwell, vol. 118(4), pages 785-815, October.
    8. repec:gam:jsusta:v:10:y:2018:i:2:p:334-:d:129103 is not listed on IDEAS
    9. repec:aen:journl:ej38-4-kersting is not listed on IDEAS
    10. KORNEK, Urik & LESSMANN, Kai & TULKENS, Henry, 2014. "Transferable and non transferable utility implementations of coalitional stability in integrated assessment models," CORE Discussion Papers 2014035, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    11. Christian Gollier and Jean Tirole, 2015. "Negotiating effective institutions against climate change," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).

    More about this item

    Keywords

    Climate Policy; Climate Coalition; Game Theory; Free Riding;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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