Climate Clubs: Overcoming Free-Riding in International Climate Policy
- (pp. 1339-70)
(Complimentary)
Abstract
Notwithstanding great progress in scientific and economic understanding of climate change, it has proven difficult to forge international agreements because of free-riding, as seen in the defunct Kyoto Protocol. This study examines the club as a model for international climate policy. Based on economic theory and empirical modeling, it finds that without sanctions against non-participants there are no stable coalitions other than those with minimal abatement. By contrast, a regime with small trade penalties on non-participants, a Climate Club, can induce a large stable coalition with high levels of abatement. (JEL Q54, Q58, K32, K33)Citation
Nordhaus, William. 2015. "Climate Clubs: Overcoming Free-Riding in International Climate Policy." American Economic Review, 105 (4): 1339-70. DOI: 10.1257/aer.15000001Additional Materials
JEL Classification
- K32 Environmental, Health, and Safety Law
- K33 International Law
- Q54 Climate; Natural Disasters and Their Management; Global Warming
- Q58 Environmental Economics: Government Policy