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Climate Policy Negotiations with Incomplete Information

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  • Kai A. Konrad
  • Marcel Thum

Abstract

type="main" xml:id="ecca12065-abs-0001"> We analyse bargaining over international climate agreements in a setting with incomplete information about abatement costs. Incomplete information is known as one of the key reasons why negotiations may fail more generally, and why efficiency gains cannot be exploited. We ask whether unilateral commitment to high abatement reduces or increases the likelihood for an efficient negotiation outcome. We find that such commitment behaviour reduces the gains from global cooperation and that, in turn, this reduces the probability of reaching efficient international environmental agreements.

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  • Kai A. Konrad & Marcel Thum, 2014. "Climate Policy Negotiations with Incomplete Information," Economica, London School of Economics and Political Science, vol. 81(322), pages 244-256, April.
    • Handle: RePEc:bla:econom:v:81:y:2014:i:322:p:244-256
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    File URL: http://hdl.handle.net/10.1111/ecca.2014.81.issue-322
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    1. Hoffmann, Sönke & Mihm, Benedikt & Weimann, Joachim, 2015. "To commit or not to commit? An experimental investigation of pre-commitments in bargaining situations with asymmetric information," Journal of Public Economics, Elsevier, vol. 121(C), pages 95-105.
    2. Sönke Hoffmann & Benedikt Mihm & Joachim Weimann, 2014. "To Commit or not to Commit? An Experimental Investigation of Pre-Commitments in Bargaining Situations with Asymmetric Information," CESifo Working Paper Series 4835, CESifo.
    3. Weimann Joachim, 2015. "Die Rolle von Verhaltensökonomik und experimenteller Forschung in Wirtschaftswissenschaft und Politikberatung," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 16(3), pages 231-252, October.
    4. Konrad, Kai A. & Stolper, Tim B.M., 2016. "Coordination and the fight against tax havens," Journal of International Economics, Elsevier, vol. 103(C), pages 96-107.
    5. Kai A. Konrad & Marcel Thum, 2018. "Does a Clean Development Mechanism Facilitate International Environmental Agreements?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(4), pages 837-851, April.
    6. Kai A. Konrad & Marcel Thum, 2020. "Equilibrium opacity in ultimatum‐offer bargaining," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(5), pages 1515-1529, September.
    7. Kai A. Konrad & Marcel Thum, 2012. "The Role of Economic Policy in Climate Change Adaptation," CESifo Working Paper Series 3959, CESifo.
    8. Kai A. Konrad, 2012. "Kommentar zum Vortrag von Joachim Weimann: Wie sinnvoll ist der klimapolitische Alleingang Deutschlands?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 65(12), pages 40-41, June.
    9. Matsushima, Noriaki & Shinohara, Ryusuke, 2019. "Pre-negotiation commitment and internalization in public good provision through bilateral negotiations," Journal of Public Economics, Elsevier, vol. 175(C), pages 84-93.
    10. Kai A. Konrad & Marcel Thum, 2021. "The better route to global tax coordination: Gradualism or multilateralism?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(2), pages 793-811, May.
    11. Alejandro Caparrós, 2016. "Bargaining and International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(1), pages 5-31, September.
    12. Carsten Helm & Franz Wirl, 2016. "Climate Policies with Private Information: The Case for Unilateral Action," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(4), pages 893-916.
    13. Håkon Sælen, 2020. "Under What Conditions Will the Paris Process Produce a Cycle of Increasing Ambition Sufficient to Reach the 2°C Goal?," Global Environmental Politics, MIT Press, vol. 20(2), pages 83-104, May.
    14. Haupt, Alexander & Krieger, Tim, 2020. "The role of relocation mobility in tax and subsidy competition," Journal of Urban Economics, Elsevier, vol. 116(C).
    15. Andreas Löschel & Dirk Rübbelke, 2014. "On the Voluntary Provision of International Public Goods," Economica, London School of Economics and Political Science, vol. 81(322), pages 195-204, April.
    16. Julian Lamprecht & Marcel Thum, 2023. "Opacity in bargaining over public good provision," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 25(5), pages 1069-1095, October.
    17. Fabio Sferra & Massimo Tavoni, 2013. "Endogenous Participation in a Partial Climate Agreement with Open Entry: A Numerical Assessment," Working Papers 2013.60, Fondazione Eni Enrico Mattei.
    18. Anwesha Banerjee & Stefano Barbieri & Kai A. Konrad, 2022. "Climate Policy, Irreversibilities and Global Economic Shocks," Working Papers tax-mpg-rps-2022-11, Max Planck Institute for Tax Law and Public Finance.
    19. Gregor Schwerhoff & Ulrike Kornek & Kai Lessmann & Michael Pahle, 2018. "Leadership In Climate Change Mitigation: Consequences And Incentives," Journal of Economic Surveys, Wiley Blackwell, vol. 32(2), pages 491-517, April.
    20. Buchholz Wolfgang & Heindl Peter, 2015. "Ökonomische Herausforderungen des Klimawandels," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 16(4), pages 324-350, December.
    21. Wolfgang Buchholz & Todd Sandler, 2017. "Successful Leadership in Global Public Good Provision: Incorporating Behavioural Approaches," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(3), pages 591-607, July.

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