Simulating with Rice Coalitionally Stable Burden Sharing Agreements for the Climate Change Problem

Center for Operations Research and Econometrics Working Paper No. 9926, CESifo Working Paper Series No. 228

34 Pages Posted: 5 Jan 2000

See all articles by Henry Tulkens

Henry Tulkens

Catholic University of Louvain - Center for Operations Research and Econometrics (CORE)

Johan Eyckmans

Catholic University of Leuven (KUL) - Center for Economic Studies

Date Written: December 1999

Abstract

In this paper we test empirically with the Nordhaus and Yang (1996) RICE model the core property of the transfer scheme advocated by Germain, Toint and Tulkens (1997). This scheme is designed to sustain full cooperation in a voluntary international environmental agreement by making all countries at least as well off as they would be by joining coalitions adopting emission abatement policies that maximize their coalition payoff; under the scheme no individual country, nor any subset of countries would have an interest in leaving the international environmental agreement. The simulations show that the transfer scheme yields an allocation in the core of the carbon emission abatement game associated with the RICE model. Finally, we discuss some practical implications of the transfer scheme for current climate negotiations.

JEL Classification: F02, F47, C6, C7

Suggested Citation

Tulkens, Henry and Eyckmans, Johan, Simulating with Rice Coalitionally Stable Burden Sharing Agreements for the Climate Change Problem (December 1999). Center for Operations Research and Econometrics Working Paper No. 9926, CESifo Working Paper Series No. 228, Available at SSRN: https://ssrn.com/abstract=197069

Henry Tulkens (Contact Author)

Catholic University of Louvain - Center for Operations Research and Econometrics (CORE) ( email )

34 Voie du Roman Pays
B-1348 Louvain-la-Neuve, b-1348
Belgium
+32 10 47 43 21 (Phone)
+32 10 47 43 01 (Fax)

Johan Eyckmans

Catholic University of Leuven (KUL) - Center for Economic Studies ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

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