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Sharing the climate policy burden in the EU

  • Aidt, Toke
  • Greiner, Sandra

The question of how to share the costs of the measures to be taken against global warming is one of the most controversial questions in the international climate policy debate, and is, as yet, unsettled. The burden sharing agreement (BSA) reached by EU Member States is a rare example of a successful (regional) burden sharing scheme. The agreement was reached in two stages in March 1997 (pre-Kyoto) and in the Spring of 1998 (post-Kyoto). This paper analyses, from a political economy perspective, the factors which facilitated burden sharing within the EU and which determined the particular sharing rule adopted. Three ?stylised facts? emerge from the study. First, countries with high national targets, which were assigned relatively large shares in the pre-Kyoto BSA, had their shares reduced significantly in the post-Kyoto BSA. Second, the country presiding over the negotiations was assigned a disproportionate large share. Third, attempts were made to relax political constraints by singling out the abatement requirements of specific sectors. We propose a simple game-theoretical model to explain these facts. We show how the share of the total burden that a country has to shoulder in equilibrium depends on what national targets it adopts, the fall-back positions of the other countries, and on who chairs the negotiations

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Paper provided by Hamburg Institute of International Economics (HWWA) in its series HWWA Discussion Papers with number 176.

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Date of creation: 2002
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Handle: RePEc:zbw:hwwadp:26159
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  1. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-50, September.
  2. Ariel Rubinstein, 2010. "Perfect Equilibrium in a Bargaining Model," Levine's Working Paper Archive 252, David K. Levine.
  3. Coughlin, Peter & Nitzan, Shmuel, 1981. "Electoral outcomes with probabilistic voting and Nash social welfare maxima," Journal of Public Economics, Elsevier, vol. 15(1), pages 113-121, February.
  4. Putnam, Robert D., 1988. "Diplomacy and domestic politics: the logic of two-level games," International Organization, Cambridge University Press, vol. 42(03), pages 427-460, June.
  5. Axel Michaelowa, 1998. "Climate policy and interest Groups—A Public choice analysis," Intereconomics: Review of European Economic Policy, Springer, vol. 33(6), pages 251-259, November.
  6. Carsten Helm & Udo E. Simonis, 2001. "Distributive Justice in International Environmental Policy: Axiomatic Foundation and Exemplary Formulation," Environmental Values, White Horse Press, vol. 10(1), pages 5-18, February.
  7. Barrett, Scott, 1990. "The Problem of Global Environmental Protection," Oxford Review of Economic Policy, Oxford University Press, vol. 6(1), pages 68-79, Spring.
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