Implications of Inequality Aversion for International Climate Policy

23 Pages Posted: 12 Aug 2011

See all articles by Carsten Vogt

Carsten Vogt

Zentrum fuer EuropSische Wirtschaftsforschung (ZEW Centre for European Economic Research), Environmental & Resource Economics

Bodo Sturm

Leipzig University of Applied Sciences - HTWK Leipzig

Date Written: August 12, 2011

Abstract

In this paper, we extend the Fehr and Schmidt model of inequality aversion to a situation where the players differ with respect to their benefits and costs from contributions to a non-linear public good. A necessary condition for contributing to the public good is that the players’ benefit exceeds some critical value. Using data from the impact assessment model RICE and estimates for inequality aversion from the experimental literature, we show that this condition fails to hold for major countries involved in international climate policy.

Keywords: Climate policy, public good game, inequality aversion, voluntary cooperation

JEL Classification: C72, D63, H41, Q54

Suggested Citation

Vogt, Carsten and Sturm, Bodo, Implications of Inequality Aversion for International Climate Policy (August 12, 2011). ZEW - Centre for European Economic Research Discussion Paper No. 11-050, Available at SSRN: https://ssrn.com/abstract=1908722 or http://dx.doi.org/10.2139/ssrn.1908722

Carsten Vogt (Contact Author)

Zentrum fuer EuropSische Wirtschaftsforschung (ZEW Centre for European Economic Research), Environmental & Resource Economics ( email )

Eco-management
D-68161 Mannheim
Germany
+49 6211235200 (Phone)
+49 6211235226 (Fax)

Bodo Sturm

Leipzig University of Applied Sciences - HTWK Leipzig ( email )

Leipzig
Germany

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