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The benefits of cooperation under uncertainty: the case of climate change

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  • BRECHET, Thierry
  • THENIE, Julien
  • ZEIMES, Thibaut
  • ZUBER, Stéphane

Abstract

This article presents an analysis of the behavior of countries defining their climate policies in an uncertain context. The analysis is made using the S-CWS model, a stochastic version of an integrated assessment growth model. The model includes a stochastic definition of the climate sensitivity parameter. We show that the impact of uncertainty on policy design critically depends on the shape of the damage function. We also examine the benefits of cooperation in the context of uncertainty: we highlight the existence of an additional benefit of cooperation, namely risk reduction.
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  • BRECHET, Thierry & THENIE, Julien & ZEIMES, Thibaut & ZUBER, Stéphane, 2012. "The benefits of cooperation under uncertainty: the case of climate change," LIDAM Reprints CORE 2435, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:2435
    DOI: 10.1007/s10666-011-9281-3
    Note: In : Environmental Modeling Assessment, 17(1-2), 149-162, 2012
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    Cited by:

    1. Thierry Brechet & Henry Tulkens, 2015. "Climate Policies: A Burden, or a Gain?," The Energy Journal, , vol. 36(3), pages 155-170, July.

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    More about this item

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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