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Climate change coalition formation and equilibrium strategies in mitigation games in the post-Kyoto Era

  • Jing Wu
  • Jean-Claude Thill
Original Paper
  • 40 Downloads

Abstract

This paper analyzes the formation of country coalitions in the context of international negotiations on climate change mitigation and simulates the emergence of an equilibrium solution in this game-theoretic framework, while accounting for the interplay with external influences. Coalition formation is gauged through clustering analysis on multiple factors including natural, economic, and social factors, RCPs, and other aspects. Projected emission is found to be the main determinant in forming coalitions, and the USA, EU, China + India, and the rest of the world constitute the four-coalition configuration that is stable across different scenarios. Under this base configuration, the Regional Integrated Climate-Economy model for Coalition Game model is implemented to assess the sensitivity of equilibrium solutions to parameter uncertainties, sanctions on non-mitigation, and adjustments in coalition composition. The main conclusion of the game simulations is that no coalition would adopt a mitigation strategy at the Nash equilibrium if no penalty is in place. The Nash equilibrium remains stable even when the climatic and economic parameters are disturbed. As an alternative to the conventional game, an external sanction is imposed on coalitions that choose not to mitigate climate change; in this scenario, climate change mitigation propagates across coalitions according to various sanction levels. The paper also shows that a social welfare compensation between two coalitions may alter the equilibrium game strategy depending on whether the compensation outweighs the welfare loss from mitigation.

Keywords

Climate coalition Coalition formation Mitigation game Nash equilibrium 

Notes

Acknowledgements

This work is supported by the National Key R&D Plan Program of China No. 2016YFA0602702, National Social Science Foundation of China No. 14CGJ025, and National Science Foundation of China No. 41501127. We thank the reviewers for their comments, which have helped us enhance the quality of this work.

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Copyright information

© Springer Nature B.V. 2018

Authors and Affiliations

  1. 1.Institute of Policy and ManagementChinese Academy of SciencesBeijingChina
  2. 2.Department of Geography and Earth SciencesUniversity of North Carolina at CharlotteCharlotteUSA

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