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Unspoken ethical issues in the climate affair: Insights from a theoretical analysis of negotiation mandates

Author

Listed:
  • Franck Lecocq

    (LEF - Laboratoire d'Economie Forestière - INRA - Institut National de la Recherche Agronomique - AgroParisTech)

  • Jean Charles Hourcade

    () (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

Abstract

Taking climate change as an example, this paper provides new insights on the optimal provision of a long-term public good within and across generations. We write the Bowen-Lindhal-Samuelson (BLS) conditions for the optimal provision of the public good in a world divided into N countries, with two periods, present and future, and we simultaneously determine the optimal response in the first and second periods for a given rate of pure time preference. However, the Negishi weights at second period cannot be determined unambiguously, even under a "no redistribution constraint" within each generation, because they depend on non-observable future incomes; and thus on the answers to two often-overlooked ethical questions: (i) Do rich countries agree on deals which recognize that developing countries may catch up with developed countries in the long run, or do they use their negotiating powers to preserve the current balance of power? And (ii) does each country consider only the welfare of its own future citizens (dynastic solidarity) or does it extend its concern to all future human beings (universal solidarity)? Answers to (i) and (ii)-critical in the debate about how to correct the market failures causing global warming-define four sets of Negishi weights and intertemporal welfare functions, which we interpret as four mandates that countries could give to the Chair of an international negotiation on climate change to find an optimal solution. We find that in all mandates, public good provision expenditures are decreasing functions of income at first period. But each mandate leads to a different allocation of expenditures at second period and to different optimal levels of public good provision at both first and second periods. Finally, we show that only one of these four mandates defines a space for viable compromises.

Suggested Citation

  • Franck Lecocq & Jean Charles Hourcade, 2012. "Unspoken ethical issues in the climate affair: Insights from a theoretical analysis of negotiation mandates," Post-Print hal-00716658, HAL.
  • Handle: RePEc:hal:journl:hal-00716658
    DOI: 10.1007/s00199-010-0589-z
    Note: View the original document on HAL open archive server: https://hal-enpc.archives-ouvertes.fr/hal-00716658
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    References listed on IDEAS

    as
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    Cited by:

    1. Jean-Marc Burniaux & Joaquim Oliveira Martins, 2012. "Carbon leakages: a general equilibrium view," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 49(2), pages 473-495, February.
    2. Timilsina, Govinda R., 2012. "Economic implications of moving toward global convergence on emission intensities," Policy Research Working Paper Series 6115, The World Bank.
    3. Aurélie Méjean & Franck Lecocq & Yacob Mulugetta, 2015. "Equity, burden sharing and development pathways: reframing international climate negotiations," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 15(4), pages 387-402, November.
    4. Luc Lauwers, 2012. "Intergenerational equity, efficiency, and constructibility," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 49(2), pages 227-242, February.
    5. Charles Figuières & Mabel Tidball, 2012. "Sustainable exploitation of a natural resource: a satisfying use of Chichilnisky’s criterion," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 49(2), pages 243-265, February.
    6. Armon Rezai & Duncan Foley & Lance Taylor, 2012. "Global warming and economic externalities," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 49(2), pages 329-351, February.
    7. Graciela Chichilnisky, 2012. "Economic theory and the global environment," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 49(2), pages 217-225, February.
    8. Elinor Ostrom, 2012. "Nested externalities and polycentric institutions: must we wait for global solutions to climate change before taking actions at other scales?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 49(2), pages 353-369, February.
    9. Prajit Dutta & Roy Radner, 2012. "Capital growth in a global warming model: will China and India sign a climate treaty?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 49(2), pages 411-443, February.
    10. Etienne Espagne, 2016. "Climate Finance at COP21 and After: Lessons Learnt," CEPII Policy Brief 2016-09, CEPII research center.
    11. Jean-Charles Hourcade & P.-R. Shukla, 2015. "Cancun’s paradigm shift and COP 21: to go beyond rhetoric," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 15(4), pages 343-351, November.

    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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