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Information disclosure and dynamic climate agreements: Shall the IPCC reveal it all?

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  • Vosooghi, Sareh
  • Caparrós, Alejandro

Abstract

This paper examines the role of public information communication in dynamic self-enforcing climate agreements. We consider a framework with implicit contracts but also a dynamic coalition formation context. In a stochastic game, where the social cost of Greenhouse Gasses (GHG) is an unknown random variable, an information sender, such as the Intergovernmental Panel on Climate Change (IPCC), controls the release of verifiable information about the unknown state variable to the countries. The equilibrium communication strategy of the IPCC takes a threshold form, above which the IPCC reveals all the information available, even if it hurts the prospect of approaching the socially optimum level of emissions. The case where the IPCC remains silent, below the threshold, vanishes as the sender gets perfectly informed about the underlying social cost.

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  • Vosooghi, Sareh & Caparrós, Alejandro, 2022. "Information disclosure and dynamic climate agreements: Shall the IPCC reveal it all?," European Economic Review, Elsevier, vol. 143(C).
    • Handle: RePEc:eee:eecrev:v:143:y:2022:i:c:s0014292122000083
    DOI: 10.1016/j.euroecorev.2022.104042
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    1. Gatti, Donatella, 2022. "Going green and (un)equal ? Political coalitions, redistribution, and the environment," Economic Modelling, Elsevier, vol. 116(C).

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    More about this item

    Keywords

    Climate change; International Environmental Agreements; Implicit agreements; Coalition formation; Uncertainty; Signalling;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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