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Renegotiation-Proof Climate Agreements with Full Participation: Conditions for Pareto-Efficiency

Asheim, Geir Bjarne; Holtsmark, Bjart
Journal article; AcceptedVersion; Peer reviewed
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peclag02.pdf (266.8Kb)
Year
2009
Permanent link
http://urn.nb.no/URN:NBN:no-33850

CRIStin
359297

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  • Økonomisk institutt [1501]
Original version
Environmental and Resource Economics. 2009, 43 (4), 519-533, DOI: http://dx.doi.org/10.1007/s10640-008-9247-3
Abstract
Recent contributions show that climate agreements with broad participation can be implemented as weakly renegotiation-proof equilibria in simple models of greenhouse gas abatement where each country has a binary choice between cooperating (i.e., abate emissions) or defecting (no abatement). Here we show that this result carries over to a model where countries have a continuum of emission choices. Indeed, a Pareto-efficient climate agreement can always be implemented as a weakly renegotiation-proof equilibrium, for a sufficiently high discount factor. This means that one need not trade-off a narrow but deep treaty with a broad but shallow treaty.

The final publication is available at link.springer.com
 
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