Stability of international climate coalitions — A comparison of transfer schemes

Nagashima, Miyuki; Dellink, Rob; Ierland, Ekko van; Weikard, Hans‐Peter

doi:10.1016/j.ecolecon.2008.10.006

Cited by 54 publications

(48 citation statements)

References 21 publications

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“…To further specify the model, we adopt the STACO-model introduced by Finus et al (2006) and refined by Nagashima et al (2009) and Weikard et al (2010). Here, we focus on the main features of the model; in an Appendix we provide details on the specification of the benefit and abatement cost functions.…”

Section: Numerical Model and Datamentioning

confidence: 99%

“…The assumption of linear benefits implies that regions have dominant strategies; the optimal response functions do neither depend on the actions of other players, nor on the stock of greenhouse gases. We calibrate the model as far as possible (regional emission and GDP paths, regional abatement costs) on the MIT-EPPA model (Babiker et al 2001 andEllerman andDecaux 1998), but as this model does not contain a damage cost module, we have to rely on other sources (mainly Nordhaus andBoyer 2001 andTol 1997) for calibrating the benefits from abatement; see Nagashima et al (2009) and Dellink et al (2009) for more details.…”

Section: Numerical Model and Datamentioning

confidence: 99%

“…We do this using the STACO model introduced by Finus et al (2006) and refined by Nagashima et al (2009). STACO is a global model comprising 12-regions for each of which abatement cost and benefit functions are defined.…”

Section: Introductionmentioning

confidence: 99%

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Sticks and carrots for the design of international climate agreements with renegotiations

Weikard

Dellink

2010

Ann Oper Res

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This paper examines renegotiations of international climate agreements for carbon abatement. We explore coalition stability under 'optimal transfers' that have been suggested to stabilise international environmental agreements (e.g. McGinty in Oxford Economic Papers 59, [45][46][47][48][49][50][51][52][53][54][55][56][57][58][59][60][61][62] 2007). Such transfer schemes need to be refined when agreements are renegotiated. We determine the requirements that transfers between signatories of an international climate agreement must satisfy in order to stabilise the sequence of agreements that performs best in terms of provision of the public good 'carbon abatement'. If these requirements are met, no country wants to change its membership status at any stage. In order to demonstrate the applicability of our result we use the STACO model, a 12-regions global model, to assess the impact of well-designed transfer rules on the stability of an international climate agreement. Although there are strong free-rider incentives, we find a stable grand coalition in the first commitment period in a game with one round of renegotiations if renegotations take place sufficiently early.

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Section: Numerical Model and Datamentioning

confidence: 99%

Section: Numerical Model and Datamentioning

confidence: 99%

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Sticks and carrots for the design of international climate agreements with renegotiations

Weikard

Dellink

2010

Ann Oper Res

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“…Carraro et al (2006) et al (2010) analyses the negotiation strategy of the European Union, evaluating the incentives of key players to join future climate agreements. Nagashima et al (2009) uses the STACO model to analyse different transfer schemes and their impact on participation incentives, global welfare and abatement efforts. However, the STACO model does not explicitly model the linkages between economic, energy, and climatic variables, but rather relies on reduced-form cost and benefit functions.…”

Section: Introductionmentioning

confidence: 99%

Incentives and stability of international climate coalitions: An integrated assessment

Bosetti¹,

Carraro²,

Cian³

et al. 2013

Energy Policy

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c We analyse climate coalitions with an integrated assessment model. c Coalitions' profitability and stability is analysed under alternative assumptions. c Effective coalitions should include larger emitters (such as India and China). c A coalition that achieves 550 ppm CO 2 -eq is not internally stable. c A stable coalition can achieve around 518 ppme in 2050 and 600 ppme in 2100.a r t i c l e i n f o t r a c tThis paper analyses the incentives to participate in an international climate agreement and the stability of the resulting climate coalition using the integrated assessment model WITCH. Coalition stability is assessed under alternative assumptions concerning the pure rate of time preference, the aggregation of social welfare, and the severity of climate damages. The profitability, stability, and strong potential internal stability of a number of coalitions, those potentially effective in reducing GHG emissions, is explored in the paper. The main conclusion is that only the grand coalition, i.e. a coalition where all world regions cooperate to reduce emissions, can maintain GHG concentration below 550 ppm CO 2 -eq. However, this coalition is not internally stable, even when allowing for monetary transfers across world regions. Nonetheless, the paper also shows that strongly potentially internally stable coalitions exist, though of smaller size, which can mitigate global warming and limit GHG concentrations to 600 ppm CO 2 -eq.

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“…The distribution of coalitional gains across countries can be organised through transfer schemes which are effective instruments to offset free-riding incentives and improve the stability of international climate agreements (ICAs) (Carraro and Siniscalco 1993;Barrett 1995;Botteon and Carraro 1997;Weikard et al 2006;Carraro et al 2006;Weikard 2009;Nagashima et al 2009). Sharing the gains of cooperation is solving a bargaining problem (Nash 1950;Powell 2002); hence, the Nash bargaining solution (NBS) can be used to determine transfer schemes for ICAs.…”

Section: Introductionmentioning

confidence: 99%

Nash bargaining solutions for international climate agreements under different sets of bargaining weights

Shu-min

Ierland

Weikard

et al. 2017

Int Environ Agreements

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Bargaining is a tool to share collaborative gains and to facilitate reaching agreement. To improve incentives to join an international climate agreement (ICA), the Nash bargaining solution can be used to distribute cooperative gains across signatories. In this paper, we examine how the formation of ICAs and their mitigation efficiency are impacted by the use of the Nash bargaining solution. In a Nash bargaining game with heterogeneous players, bargaining powers are unequal and may be driven by different characteristics of the players. We employ different sets of asymmetric bargaining weights in order to examine the effectiveness of climate coalitions that emerge as stable agreements. Using the Nash bargaining solution, we obtain results from the stability of coalition model (STACO). We find that the Nash bargaining solution can improve the participation incentives and performances of ICAs as compared to agreements that do not redistribute gains from cooperation, but its capacity to overcome free-riding incentives is limited. However, if Nash bargaining accounts for outside options of players, we find larger stable coalitions and higher global abatement levels. In fact, Nash bargaining with outside options can stabilise the largest coalitions that can possibly be stable in our game.

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Stability of international climate coalitions — A comparison of transfer schemes

Cited by 54 publications

References 21 publications

Sticks and carrots for the design of international climate agreements with renegotiations

Sticks and carrots for the design of international climate agreements with renegotiations

Incentives and stability of international climate coalitions: An integrated assessment

Nash bargaining solutions for international climate agreements under different sets of bargaining weights

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