Advertisement

Environmental and Resource Economics

, Volume 62, Issue 4, pp 665–688 | Cite as

Hope or Despair? Formal Models of Climate Cooperation

  • Jon HoviEmail author
  • Hugh Ward
  • Frank Grundig
Article

Abstract

We review formal (and some more informal) models of climate cooperation derived from economics and political science. These models convey two main messages. On one hand, they suggest that the prospects for effective climate cooperation are bleak: The standard view is that stable coalitions are small and that renegotiation-proof equilibria require that only a few countries participate. On the other hand, there might be light at the end of the tunnel after all. First, more recent work suggests that larger coalitions can be made stable. Second, other recent work suggests that it may be possible to design a renegotiation-proof climate agreement with broad or even full participation. Third, deposit-refund systems might help solve some of the obstacles for effective climate cooperation. Fourth, although the “law of the least ambitious program” pinpoints severe constraints on effective cooperation, this law has its limits. Fifth, countries may use cooperative probes to build trust. Sixth, cooperation might emerge in a completely decentralized fashion. Finally, experiments indicate that some of the conditions for effective cooperation that are taken for granted in most formal models might in fact be overly strict.

Keywords

Climate change Game-theory Collective action International agreements Participation Compliance 

References

  1. Aakre S (2013) Enforcing compliance in climate agreements: any role for costly trade restrictions? CICERO, Oslo. Unpublished working paperGoogle Scholar
  2. Aakre S, Helland L, Hovi J (2014) When does informal enforcement work? BI Norwegian Business School, Oslo. Unpublished working paperGoogle Scholar
  3. Altamirano-Cabrera JC, Finus M, Dellink R (2008) Do abatement quotas lead to more successful climate coalitions? Manch Sch 76(1):104–129CrossRefGoogle Scholar
  4. Andonova LB, Betsill MM, Bulkeley H (2009) Transnational climate governance. Glob Environ Polit 9(2):52–73CrossRefGoogle Scholar
  5. Asheim GB, Froyn CB, Hovi J, Menz F (2006) Regional versus global cooperation on climate control. J Environ Econ Manag 51(1):93–109Google Scholar
  6. Asheim GB, Holtsmark B (2009) Renegotiation-proof climate agreements with full participation: conditions for pareto-efficiency. Environ Resour Econ 43(4):519–533CrossRefGoogle Scholar
  7. Axelrod R (1984) The evolution of cooperation. Basic Books, New YorkGoogle Scholar
  8. Axelrod R, Keohane RO (1985) Achieving cooperation under anarchy: strategies and institutions. Int Org 25(4):866–874Google Scholar
  9. Barrett S (1994) Self-enforcing international environmental agreements. Oxf Econ Pap 46(4):878–894Google Scholar
  10. Barrett S (1997) The strategy of trade sanctions in international environmental agreements. Energy Res Econ 19(4):345–361Google Scholar
  11. Barrett S (1999) A theory of full international cooperation. J Theor Polit 11(4):519–541CrossRefGoogle Scholar
  12. Barrett S (2002) Consensus treaties. J Inst Theor Econ 158(4):529–547CrossRefGoogle Scholar
  13. Barrett S (2003) Environment and statecraft: the strategy of environmental treaty making. Oxford University Press, OxfordCrossRefGoogle Scholar
  14. Barrett S (2005) The theory of international environmental agreements. In: Mäler K-G, Vincent JR (eds) Handbook of environmental economics, vol 3. Elsevier, Amsterdam, pp 1458–1514Google Scholar
  15. Barrett S (2007) Why cooperate? The incentive to supply global public goods. Oxford University Press, OxfordGoogle Scholar
  16. Barrett S (2013) Climate treaties and approaching catastrophes. J Environ Econ Manag 66(2):235–250Google Scholar
  17. Barrett S, Dannenberg A (2012) Climate negotiations under scientific uncertainty. PNAS 109(43):17372–17376CrossRefGoogle Scholar
  18. Barrett S, Dannenberg A (2014) Negotiating to avoid “gradual” versus “dangerous” climate change. an experimental test of two prisoners’ dilemmas. In: Cherry T, Hovi J, McEvoy D (eds) Toward a new climate agreement. Conflict, resolution and governance. Routledge, London, pp 61–90Google Scholar
  19. Barrett S, Stavins RN (2003) Increasing participation and compliance in international climate agreements. Int Environ Agreem Polit Law Econ 3(4):349–376CrossRefGoogle Scholar
  20. Bernauer T, Kalbhenn A, Koubi V, Spielker G (2010) A comparison of international and domestic sources of global governance dynamics. Br J Polit Sci 40(4):509–538CrossRefGoogle Scholar
  21. Biancardi M, Villani G (2010) International environmental agreements with asymmetric countries. Comput Econ 36(1):69–92CrossRefGoogle Scholar
  22. Bloch F (1997) Non-cooperative models of coalition formation in games with spillovers. In: Carraro C, Siniscalco D (eds) New directions in the economic theory of the environment. Cambridge University Press, CambridgeGoogle Scholar
  23. Breitmeier H, Young OR, Zürn M (2006) Analyzing international environmental regimes: from case study to database. MIT Press, CambridgeGoogle Scholar
  24. Buchholz W, Haslbeck C, Sandler T (1998) When does partial cooperation pay? Finanzarchiv 55(1):1–20Google Scholar
  25. Caparrós A, Pereau JC (2013) Forming coalitions to negotiate north-south climate agreements. Environ Dev Econ 18(1):69–92CrossRefGoogle Scholar
  26. Caparrós A, Pereau JC, Tazdaït T (2004) North-south climate change negotiations: a sequential game with asymmetric information. Pub Choice 121(3–4):455–480CrossRefGoogle Scholar
  27. Carraro C (1999) The structure of international agreements on climate change. In: Carraro C (ed) International environmental agreements on climate change. Kluwer, DordrechtCrossRefGoogle Scholar
  28. Carraro C (2000) The economics of coalition formation. In: Gupta J, Grubb M (eds) Climate change and European leadership. Kluwer, DordrechtGoogle Scholar
  29. Carraro C, Eyckmans J, Finus M (2006) Optimal transfers and participation decisions in international environmental agreements. Rev Int Organ 1(4):379–396CrossRefGoogle Scholar
  30. Carraro C, Marchiori C (2003) Stable coalitions. In: Carraro C (ed) The endogenous formation of economic coalitions. Edward Elgar, CheltenhamCrossRefGoogle Scholar
  31. Carraro C, Siniscalco D (1992) The international dimension of environmental policy. Eur Econ Rev 36(2–3):379–387CrossRefGoogle Scholar
  32. Carraro C, Siniscalco D (1993) Strategies for the international protection of the environment. J Pub Econ 52(3):309–328CrossRefGoogle Scholar
  33. Carraro C, Siniscalco D (1997) R&D cooperation and the stability of international environmental agreements. In: Carraro C (ed) International environmental agreements: strategic policy issues. Edward Elgar, CheltenhamGoogle Scholar
  34. Carraro C, Marchiori C, Oreffice S (2009) Endogenous minimum participation in international environmental treaties. Environ Resour Econ 42(3):411–425CrossRefGoogle Scholar
  35. Chander P, Tulkens H (1992) Theoretical foundations of negotiations and cost sharing in transfrontier pollution problems. Eur Econ Rev 36(2–3):388–398CrossRefGoogle Scholar
  36. Chander P, Tulkens H (1993) Strategically stable cost-sharing in an economic-ecological negotiation process. In: Mäler K-G (ed) International environmental problems: an economic perspective. Kluwer, DordrechtGoogle Scholar
  37. Cherry TL, McEvoy DM (2013) Enforcing compliance with environmental agreements in the absence of strong institutions: an experimental analysis. Environ Resour Econ 54(1):63–77CrossRefGoogle Scholar
  38. Cherry TL, McEvoy DM, Stranlund J (2014) International environmental agreements with endogenous minimum participation and the role of inequality. In: Cherry T, Hovi J, McEvoy D (eds) Toward a new climate agreement. Conflict, resolution and governance. Routledge, London, pp 93–105Google Scholar
  39. Dannenberg A, Sturm B, Vogt C (2010) Do equity preferences matter for climate negotiators? An experimental investigation. Environ Resour Econ 47(1):91–109CrossRefGoogle Scholar
  40. Dasgupta P, Heal G (1980) Economic theory and exhaustible resources. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  41. Dasgupta P (2008) Economic progress and the idea of social capital. In: Dasgupta P, Serageldin I (eds) Social capital a multifaceted perspective. World Bank, WashingtonGoogle Scholar
  42. Dietz M, Marchiori C, August T (2012) Domestic politics and the formation of international environmental agreements. Working paper. Grantham Research Institute, LondonGoogle Scholar
  43. Eyckmans J, Finus M (2004) An almost ideal sharing scheme for coalition games with externalities. CLIMNEG working paper 62. University of Leuven (KUL)Google Scholar
  44. Farrell J, Maskin E (1989) Renegotiation in repeated games. Games Econ Behav 1(4):327–360CrossRefGoogle Scholar
  45. Fehr E, Fischbacher U (2005) The economics of strong reciprocity. In: Bowles H, Boyd RT, Fehr E, Gintis H (eds) Moral sentiments and material interests. The foundations of cooperation in economic life. MIT Press, CambridgeGoogle Scholar
  46. Fehr E, Fischbacher U, Gächter S (2002) Strong reciprocity, human cooperation and the enforcement of social norms. Hum Nat 13(1):1–25CrossRefGoogle Scholar
  47. Fehr E, Gächter S (2000) Cooperation and punishment in public goods experiments. Am Econ Rev 90(4):980–994CrossRefGoogle Scholar
  48. Fehr E, Gächter S (2002) Altruistic punishment in humans. Nature 415:137–140CrossRefGoogle Scholar
  49. Finus M (2001) Game theory and international environmental cooperation. Edward Elgar, CheltenhamCrossRefGoogle Scholar
  50. Finus M (2002) Game theory and international environmental cooperation: any practical application? In: Böhringer C, Finus M, Vogt C (eds) Controlling global warming: perspectives from economics, game theory and public choice. Edward Elgar, CheltenhamGoogle Scholar
  51. Finus M (2003) New developments in coalition theory: an application to the case of global pollution. In: Marsiliani L, Rauscher M, Withagen C (eds) Environmental policy in an international perspective. Kluwer, DordrechtGoogle Scholar
  52. Finus M (2008) Game theoretic research on the design of international environmental agreements: insights, critical remarks, and future challenges. Int Rev Environ Resour Econ 2(1):29–67CrossRefGoogle Scholar
  53. Finus M (2008a) The enforcement mechanisms of the kyoto protocol: flawed or promising concepts? Lett Spatial Resour Sci 1(1):13–25CrossRefGoogle Scholar
  54. Finus M, Maus S (2008) Modesty may pay!. J Pub Econ Theory 10(5):801–826CrossRefGoogle Scholar
  55. Finus M, Rübbelke DTG (2013) Public good provision and ancillary benefits: the case of climate agreements. Environ Resour Econ 56(2):211–226CrossRefGoogle Scholar
  56. Finus M, Rundshagen B (1998) Renegotiation-proof equilibria in a global emission game when players are impatient. Environ Resour Econ 12(3):275–306CrossRefGoogle Scholar
  57. Finus M, Rundshagen B (2003) Endogenous coalition formation in global pollution control: a partition function approach. In: Carraro C (ed) Endogenous formation of economic coalitions. Edward Elgar, CheltenhamGoogle Scholar
  58. Finus M, Rundshagen B (2009) Membership rules and stability of coalition structures in positive externality games. Soc Choice Welf 32(3):389–406CrossRefGoogle Scholar
  59. Florini A (1996) The evolution of international norms. Int Stud Quart 40(3):363–389CrossRefGoogle Scholar
  60. Froyn CB, Hovi J (2008) A climate regime with full participation. Econ Lett 99(2):317–319CrossRefGoogle Scholar
  61. Fudenberg D, Tirole J (1992) Game theory. MIT Press, CambridgeGoogle Scholar
  62. Fuentes-Albero C, Rubio SJ (2010) Can international environmental cooperation be bought? Eur J Oper Res 202(1):255–264CrossRefGoogle Scholar
  63. Gersbach H (2006) The global refunding system and climate change. Working paper, CER-ETH ZürichGoogle Scholar
  64. Gersbach H (2008) A new way to address climate change: a global refunding system. Economists’ Voice July 2008. www.bepress.com/ev
  65. Gersbach H, Winkler R (2007) On the design of global refunding and climate change. Discussion paper 6379, CEPRGoogle Scholar
  66. Gerber A, Wichardt PC (2009) Providing public goods in the absence of strong institutions. J Pub Econ 93(3–4):429–439CrossRefGoogle Scholar
  67. Gilligan MJ (2004) Is there a broader-deeper trade-off in international multilateral agreements? Int Org 58(3):459–484CrossRefGoogle Scholar
  68. Grundig F (2006) Patterns of international cooperation and the explanatory power of relative gains: an analysis of cooperation on global climate change, ozone depletion, and international trade. Int Stud Quart 50(4):781–801CrossRefGoogle Scholar
  69. Grundig F, Hovi J, Ward H (forthcoming) Modeling climate cooperation. In: Luterbacher U, Sprinz DF (eds) International relations and global climate change, 2nd edn. MIT Press, CambridgeGoogle Scholar
  70. Grundig F, Ward H, Zorick E (2001) Modeling global climate-change negotiations. In: Luterbcher U, Sprinz D (eds) International relations and global climate change. MIT Press, Cambridge, pp 153–182Google Scholar
  71. Grundig F, Hovi J, Underdal A, Aakre S (2012) Self-enforcing peace and environmental agreements. toward scholarly cross-fertilization? Int Stud Rev 14(4):522–540CrossRefGoogle Scholar
  72. Grüning C, Peters W (2010) Can justice and fairness enlarge international environmental agreements? Games 1(2):137–158CrossRefGoogle Scholar
  73. Gürerk Ö, Irlenbusch B, Rochenbach B (2006) The competitive advantage of sanctioning institutions. Science 312(5770):108–11CrossRefGoogle Scholar
  74. Hafner-Burton EM, Kahler M, Montgomery AH (2009) Network analysis for international relations. Int Org 63(2):559–592CrossRefGoogle Scholar
  75. Harrison K, McIntosh-Sundstrom L (2010) Conclusion: the comparative politics of climate change. In: Harrison K, McIntosh-Sundstrom L (eds) Global commons and domestic decisions. MIT Press, CambridgeCrossRefGoogle Scholar
  76. Heitzig J, Lessmann K, Zou Y (2011) Self-enforcing strategies to deter free-riding in the climate change mitigation game and other repeated public good games. PNAS 108(38):15739–15744Google Scholar
  77. Hoel M (1991) Global environmental problems: the effects of unilateral actions taken by one country. J Environ Econ Manag 20(1):55–70CrossRefGoogle Scholar
  78. Hoel M (1992) International environmental conventions: the case of uniform reductions of emissions. Environ Resour Econ 2(2):141–159Google Scholar
  79. Holtsmark B (2013) International cooperation on climate change: why is there so little progress? In: Fouquet R (ed) Handbook on energy and climate change. Edward Elgar, CheltenhamGoogle Scholar
  80. Hovi J, Greaker M, Hagem C, Holtsmark B (2012) A credible compliance enforcement system for the climate regime. Clim Policy 12(6):741–754CrossRefGoogle Scholar
  81. Hovi J, Skodvin T, Aakre S (2013) Can climate change negotiations succeed? Polit Gov 1(2):138–150CrossRefGoogle Scholar
  82. Hovi J, Sprinz DF (2006) The limits of the law of the least ambitious program. Glob Environ Polit 6(3):28–42CrossRefGoogle Scholar
  83. Hovi J, Underdal A (2014) Implementation, compliance, and effectiveness of policies and institutions. In: Luterbacher U, Sprinz DF (eds) International relations and climate change, 2nd edn. MIT Press, CambridgeGoogle Scholar
  84. Ismer R, Neuhoff K (2007) Border tax adjustment: a feasible way to support stringent emission trading. Eur J Law Econ 24:137–164CrossRefGoogle Scholar
  85. Keohane RO (1984) After hegemony. Cooperation and discord in the world political economy. Princeton University Press, PrincetonGoogle Scholar
  86. Kim SE, Urpelainen J (2013) Technology competition and international co-operation: friends or foes? Br J Polit Sci, Available on CJO 2013. doi: 10.1017/S0007123412000762
  87. Kosfeld M, Okada A, Riedl A (2009) Institution formation in public goods games. Am Econ Rev 99(4):1335–1355CrossRefGoogle Scholar
  88. Kratzsch U, Sieg G, Stegemann U (2012) An international agreement with full participation to tackle the stock of greenhouse gases. Econ Lett 115(3):473–476CrossRefGoogle Scholar
  89. Kydd AH (2007) Trust and mistrust in international relations. Princeton University Press, PrincetonGoogle Scholar
  90. Lange A (2006) The impact of equity-preferences on the stability of international environmental agreements. Environ Resour Econ 34:247–267CrossRefGoogle Scholar
  91. Lange A, Vogt C (2003) Cooperation in international environmental negotiations due to a preference for equity. J Pub Econ 87(9–10):2049–2067CrossRefGoogle Scholar
  92. Luterbacher U, Davis P (2010) Explaining unilateral cooperative actions: the case of greenhouse gas regulations. Monash Univ Law Rev 36(1):121–138Google Scholar
  93. Mansfield ED, Milner HV, Pevehouse JC (2007) Vetoing cooperation: the impact of veto players on preferential trading arrangements. Br J Polit Sci 37(3):403–432CrossRefGoogle Scholar
  94. Maoz Z (2010) Networks of nations: the evolution, structure, and impact of international networks, 1816–2001. Cambridge University Press, New YorkCrossRefGoogle Scholar
  95. McEvoy DM (2009) Not it: opting out of voluntary coalitions that provide a public good. Pub Choice 142(1):9–23Google Scholar
  96. McEvoy DM (2013) Enforcing compliance with international environmental agreements using a deposit-refund system. Int Environ Agreem 13(4):481–496CrossRefGoogle Scholar
  97. McGinty M (2007) International environmental agreements among asymmetric nations. Oxf Econ Pap 59(1):45–62CrossRefGoogle Scholar
  98. McGinty M (2011) A risk-dominant allocation: maximizing coalition stability. J Pub Econ Theory 13(2):311–325CrossRefGoogle Scholar
  99. McGinty M (2014) Improving the design of international environmental agreements. In: Cherry T, Hovi J, McEvoy D (eds) Toward a new climate agreement. Conflict resolution and governance. Routledge, London, pp 128–142Google Scholar
  100. Milnor JW, Shapley LS (1978) Values of large games ii: oceanic games. Math Oper Res 3(4):290–307CrossRefGoogle Scholar
  101. Nyborg K (2014) Reciprocal climate negotiators: balancing anger against even more anger. Working paper Department of Economics, University of Oslo. http://folk.uio.no/karineny/papers_files/ClimateTreatiesWithReciprocity.pdf
  102. Olson M (1965) The logic of collective action: public goods and the theory of groups. Harvard University Press, CambridgeGoogle Scholar
  103. Osgood C (1962) An alternative to war or surrender. University of Illinois Press, UrbanaGoogle Scholar
  104. Ostrom E, Ahn TK (2008) The meaning of social capital and its link to collective action. In: Svendsen GT, Svendsen GL (eds) Handbook on social capital: the troika of sociology, political science and economics. Edward Elgar, Northampton, pp 17–35Google Scholar
  105. Ostrom E, Gardner R, Walker J (1994) Rules, games and common-pool resources. Michigan University Press, Ann ArborGoogle Scholar
  106. Putnam R (1988) Diplomacy and domestic politics: the logic of two-level games. Int Org 42(4):427–460CrossRefGoogle Scholar
  107. Rabe B (2004) Statehouse and greenhouse: the evolving politics of american climate change policy. Brookings Institution Press, New YorkGoogle Scholar
  108. Sandler T (1997) Global challenges: an approach to environmental political and economic problems. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  109. Snidal D (1991) Relative gains and the pattern of international cooperation. Am Polit Sci Rev 85(3):701–726Google Scholar
  110. Straffin PD Jr (1977) The bandwagon curve. Am J Polit Sci 21(4):695–709CrossRefGoogle Scholar
  111. Tulkens H (1979) An economic model of international negotiations relating to transfrontier pollution. In: Krippendorff K (ed) Communication and control in society. Gordon and Breach, New YorkGoogle Scholar
  112. Underdal A (1980) The politics of international fisheries managements: the case of the northeast atlantic. Columbia University Press, New YorkGoogle Scholar
  113. Underdal A (1998) Introduction. In: Underdal A (ed) The politics of international environmental management. Kluwer, DordrechtCrossRefGoogle Scholar
  114. Urpelainen J (2009) Explaining the schwarzenegger phenomenon: local frontrunners in climate policy. Glob Environ Polit 9(3):82–105CrossRefGoogle Scholar
  115. Urpelainen J (2011) Can unilateral leadership promote international environmental cooperation? Int Interact 37(3):320–339CrossRefGoogle Scholar
  116. Urpelainen J (2012) Costly adjustments, markets and international reassurance. Br J Polit Sci 42(4):679–704CrossRefGoogle Scholar
  117. Urpelainen J (2012a) Technology investment, bargaining, and international environmental agreements. Int Environ Agreem 12(2):145–163CrossRefGoogle Scholar
  118. Victor DG (2006) Toward effective international cooperation on climate change: numbers, interests and institutions. Glob Environ Polit 6:90–103CrossRefGoogle Scholar
  119. Victor DG (2011) Global warming gridlock: creating more effective strategies for protecting the planet. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  120. Ward H (1996) Game theory and the politics of the global warming: the state and beyond. Polit Stud 44(4):850–871CrossRefGoogle Scholar
  121. Ward H (2006) International linkages and environmental sustainability: the effectiveness of the regime and igo networks. J Peace Res 43(2):149–166CrossRefGoogle Scholar
  122. Ward H, Grundig F, Zorick E (2001) Marching at the pace of the slowest: a model of international negotiations over global climate change. Polit Stud 49(3):438–461CrossRefGoogle Scholar
  123. Weikard HP (2009) Cartel stability under optimal sharing rule. Manch Sch 77(5):575–593CrossRefGoogle Scholar
  124. Yi S-S, Shin H (2000) Endogenous formation of research coalitions with spillovers. Int J Ind Organ 18(2):229–256CrossRefGoogle Scholar
  125. Young O (1999) Governance in world affairs. Cornell University Press, IthacaGoogle Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2014

Authors and Affiliations

  1. 1.Department of Political ScienceUniversity of OsloBlindern Norway
  2. 2.Department of GovernmentUniversity of EssexColchesterUK
  3. 3.School of Politics and International Relations, Rutherford CollegeUniversity of KentCanterburyUK

Personalised recommendations