Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/224649
Authors: 
Bühl, Vitus
Schmidt, Robert C.
Year of Publication: 
2020
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2020: Gender Economics
Abstract: 
In the presence of a tipping point for dangerous climate damages, the cooperation problem of climate protection can be transformed into a coordination problem that is much easier to deal with (Barrett, 2013). This holds in particular if the amount of greenhouse gas emissions that triggers the catastrophe is precisely known, while the well-known free-rider problem re-appears if the location of the threshold is sufficiently uncertain. In this paper, we focus on the question how the non-signatories (outsiders of a climate agreement) coordinate to avoid the catastrophe, if the tipping point is known. In particular, in light of a multiplicity of equilibria in this coordination problem, the assumption that outsiders will always successfully coordinate to avoid the threshold, even if this is in their collective interest, seems overly optimistic. We analyze how the probability that the outsiders coordinate on an equilibrium in which the threshold is avoided, affects the incentives of countries to join the climate coalition. In some cases, there are multiple equilibria at the participation stage: an equilibrium with full participation, and an equilibrium in which a much smaller coalition forms - just large enough to achieve an outcome in which the catastrophe is avoided with positive probability.
Subjects: 
tipping point
climate catastrophe
coordination game
international environmental agreement
climate cooperation
JEL: 
D62
F53
Q54
Document Type: 
Conference Paper

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