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Bargaining over a climate deal: deadline and delay

Author

Listed:
  • Courtois Pierre

    (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - INRA - Institut National de la Recherche Agronomique - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)

  • Tarik Tazdaït

    (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 nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique)

Abstract

Assuming that a North-South transfer is the key to effective climate cooperation, we ask when and how much the North should offer to the South in return for a commitment to reduce deforestation and forest degradation. In light of the risk of irreversible damage over time, we examine a negotiation with a deadline. In this case, the North threatens the South over a negotiation dead-end in case an agreement is not reached rapidly. We assess the conditions for an agreement to be immediate or delayed, and discuss those situations likely to result in negotiation failure. Despite the risk of irreversible damage over time, we show that cooperation is likely to be delayed and we identify situations wherein the North and South do not reach an agreement within the deadline. Although Pareto-improving, cooperation may collapse because of inefficiencies related to incomplete information. What's more, we show that in negotiations with a deadline, uncertainty about the benefits deriving from cooperation and the irreversibility of the damage that will be caused if cooperation isdelayed are the two key components affecting choice.

Suggested Citation

  • Courtois Pierre & Tarik Tazdaït, 2014. "Bargaining over a climate deal: deadline and delay," Post-Print halshs-01084942, HAL.
    • Handle: RePEc:hal:journl:halshs-01084942
    DOI: 10.1007/s10479-011-1018-9
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    Cited by:

    1. Kai A. Konrad & Marcel Thum, 2018. "Does a Clean Development Mechanism Facilitate International Environmental Agreements?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(4), pages 837-851, April.
    2. Salem Nechi & Belaid Aouni & Zouhair Mrabet, 2020. "Managing sustainable development through goal programming model and satisfaction functions," Annals of Operations Research, Springer, vol. 293(2), pages 747-766, October.
    3. Basak Bayramoglu & Jean-François Jacques, 2015. "International Environmental Agreements: The Case of Costly Monetary Transfers," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(4), pages 745-767, December.
    4. Alejandro Caparrós, 2016. "Bargaining and International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(1), pages 5-31, September.
    5. S. Yu & E. C. Ierland & H.-P. Weikard & X. Zhu, 2017. "Nash bargaining solutions for international climate agreements under different sets of bargaining weights," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 17(5), pages 709-729, October.

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