Abstract
In this paper we propose a non-cooperative meta-game approach to designing and assessing climate agreements among 28 European countries that will be compatible with the EU 2050 climate target. Our proposed game model is identified through statistical emulation of a large set of numerical simulations performed with the computable general equilibrium model GEMINI-E3. In this game, the players are the 28 European countries, the payoffs are related to welfare losses due to abatements and the strategies correspond to the supply of emission rights on the European carbon market. We show it is possible to design a fair burden-sharing rule that equalizes welfare losses between countries to approximately 1.2 % of their discounted household consumption. The associated European CO2 price in 2050 reaches $1100, a figure in line with previous studies. Lastly, the paper discusses various implementation issues of these types of negotiations and evaluates the cost of non-cooperation among EU countries.
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Notes
This criterion is computed from a simulation made on the GEMINI-E3 CGE model (Bernard and Vielle 2008).
All estimators (\({\alpha ^{k}_{j}}(t)\) and μ j (t)) including standard deviations are available upon request.
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Acknowledgments
The research leading to these results has received funding from the EU Seventh Framework Programme (ERMITAGE FP7/2007–2013) under Grant Agreement n∘265170 and from Qatar National Research Fund under Grant Agreement n∘6-1035-5126. We would like to thank Philippe Thalmann and Christopher Andrey for their comments and suggestions. The three referees comments have been most useful for improving the paper.
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Babonneau, F., Haurie, A. & Vielle, M. Assessment of balanced burden-sharing in the 2050 EU climate/energy roadmap: a metamodeling approach. Climatic Change 134, 505–519 (2016). https://doi.org/10.1007/s10584-015-1540-x
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DOI: https://doi.org/10.1007/s10584-015-1540-x