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

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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.

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Authors and Affiliations

  1. Department of Economics, University of Oslo, P.O.Box 1095, Blindern, 0317, Oslo, Norway

    Geir B. Asheim

  2. Statistics Norway, P.O. Box 8131 Dep, 0033, Oslo, Norway

    Bjart Holtsmark

Authors
  1. Geir B. Asheim
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  2. Bjart Holtsmark
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Correspondence to Bjart Holtsmark.

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Asheim, G.B., Holtsmark, B. Renegotiation-Proof Climate Agreements with Full Participation: Conditions for Pareto-Efficiency. Environ Resource Econ 43, 519–533 (2009). https://doi.org/10.1007/s10640-008-9247-3

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  • DOI: https://doi.org/10.1007/s10640-008-9247-3

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