The Global Political Economy of a Green Transition

By building a simple discrete choice model, we study possible paths regarding country participation in international environmental agreements (IEAs) on climate change. Preferences for action are influenced by (i) the growth rate of emissions, (ii) participation of others in IEAs, and (iii) heterogeneous costs and preferences for action. We find a variety of outcomes depending on the relative strength of effects, where sustained high level of cooperation is just one possibility. More specifically, we find that a short run increase in climate action may be followed by a decline later, while non trivial dynamics that make the evolution less predictable are another possibility. Our results indicate that a reduction in global inequalities related to low carbon transition costs are a necessary condition for sustained high levels of cooperation.