Political Influence on Non-Cooperative International Climate Policy

University of Bern - Department of Economics Working Paper No. 11-06

35 Pages Posted: 31 Aug 2011

See all articles by Ralph Winkler

Ralph Winkler

University of Bern - Department of Economics; University of Bern - Oeschger Centre for Climate Change Research

Wolfgang Habla

ZEW – Leibniz Centre for European Economic Research - Environmental and Resource Economics, Environmental Management Research

Multiple version iconThere are 2 versions of this paper

Date Written: August 31, 2011

Abstract

We analyze non-cooperative international climate policy in a setting of political competition by national interest groups. In the first stage, countries decide whether to set up an international emission permits market, which only forms if it is supported by all countries. In the second stage, countries non-cooperatively decide on the number of tradable or non-tradable emission allowances, depending on the type of regime. In both stages, special interest groups try to sway the government in their favor. We find that (i) both the choice of regime and the level of aggregate emissions only depend on the aggregate levels of organized stakes in all countries and not on their distribution among individual interest groups, and (ii) an increase in lobbying influence by a particular lobby group may backfire by inducing a change towards the less preferred regime.

Keywords: non-cooperative climate policy, political economy, emissions trading, organization of interest groups, environmental awareness

JEL Classification: D72, H23, H41, Q58

Suggested Citation

Winkler, Ralph and Habla, Wolfgang, Political Influence on Non-Cooperative International Climate Policy (August 31, 2011). University of Bern - Department of Economics Working Paper No. 11-06 . Available at SSRN: https://ssrn.com/abstract=1920210 or http://dx.doi.org/10.2139/ssrn.1920210

Ralph Winkler (Contact Author)

University of Bern - Department of Economics ( email )

Schanzeneckstrasse 1
Bern, 3001
Switzerland
+41 31 631 4508 (Phone)

HOME PAGE: http://www.ralph-winkler.de

University of Bern - Oeschger Centre for Climate Change Research ( email )

Zähringerstrasse 25
Bern, 3012
Switzerland

Wolfgang Habla

ZEW – Leibniz Centre for European Economic Research - Environmental and Resource Economics, Environmental Management Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim
Germany

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