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Pareto-Efficient Climate Agreements Can Always Be Renegotiation-Proof

Author

Listed:
  • Asheim, Geir B.

    (Dept. of Economics, University of Oslo)

  • Holtsmark, Bjart

    (Statistics Norway)

Abstract

Recent contributions show that climate agreements with broad participation can be implemented as weakly renegotiation-proof equilibria in simple models of greenhouse gas abatement where each country has a binary choice between cooperating (i.e., abate emissions) or defecting (no abatement). Here we show that this result carries over to a model where countries have a continuum of emission choices. Indeed, a Pareto-efficient climate agreement can always be implemented as a weakly renegotiation-proof equilibrium, for a sufficiently high discount factor. This means that one need not trade-off a “narrow but deep” treaty with a “broad but shallow” treaty.

Suggested Citation

  • Asheim, Geir B. & Holtsmark, Bjart, 2008. "Pareto-Efficient Climate Agreements Can Always Be Renegotiation-Proof," Memorandum 23/2008, Oslo University, Department of Economics.
    • Handle: RePEc:hhs:osloec:2008_023
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    File URL: https://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2008/Memo-23-2008.pdf
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    More about this item

    Keywords

    Climate agreements; Pareto-effiency; greenhouse gases;
    All these keywords.

    JEL classification:

    • A10 - General Economics and Teaching - - General Economics - - - General

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