Renegotiation-Proof Climate Agreements with Full Participation: Conditions for Pareto-Efficiency
Appears in the following Collection
- Økonomisk institutt 
Original versionEnvironmental and Resource Economics. 2009, 43 (4), 519-533, DOI: http://dx.doi.org/10.1007/s10640-008-9247-3
AbstractRecent 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