Environmental and Resource Economics

, Volume 43, Issue 4, pp 519–533

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

Article

DOI: 10.1007/s10640-008-9247-3

Cite this article as:
Asheim, G.B. & Holtsmark, B. Environ Resource Econ (2009) 43: 519. doi: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.

Keywords

International environmental agreements Non-cooperative game theory Pareto efficiency Weak renegotiation proofness 

Copyright information

© Springer Science+Business Media B.V. 2008

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of OsloOsloNorway
  2. 2.Statistics NorwayOsloNorway

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