Working Paper: NBER ID: w30681
Authors: Giovanni Maggi; Robert W. Staiger
Abstract: Current policies directed at mitigating global warming appear unlikely to prevent temperatures from rising to levels that would trigger a precipitous increase in the costs of climate change. Various attempts at international cooperation to avoid this outcome have failed. Why is this problem so intractable? Can we expect an 11th-hour solution? Will some countries, or even all, succumb on the equilibrium path? We address these questions through a model that features the possibility of climate catastrophe and emphasizes the role of international externalities that a country’s policies exert on other countries and intertemporal externalities that current generations exert on future generations. Within this setting, we explore the extent to which international agreements can mitigate the problem of climate change. Our analysis illuminates the role that international climate agreements can be expected to play in addressing climate change, and it points to important limitations on what such agreements can achieve, even under the best of circumstances.
Keywords: No keywords provided
JEL Codes: F02; Q54
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| international climate agreements (ICAs) (F53) | mitigate horizontal externalities (D62) |
| international climate agreements (ICAs) (F53) | cannot mitigate vertical externalities (D62) |
| noncooperative equilibrium (C72) | crisis point (H12) |
| crisis point (H12) | countries coordinate to reduce emissions (F64) |
| international climate agreements (ICAs) (F53) | slow growth of carbon stock (O44) |
| optimal outcomes (L21) | global social planner (F01) |
| heterogeneous-brink scenarios (B50) | implications for countries (F63) |