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Political Influence on Non-Cooperative International Climate Policy

32 Pages Posted: 1 Nov 2012  

Wolfgang Habla

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

Ralph Winkler

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

Multiple version iconThere are 2 versions of this paper

Date Written: October 30, 2012

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 link their domestic emission permit markets to an international market, which only forms if it is supported by all countries. In the second stage, countries non-cooperatively decide on the number of tradable emission allowances. In both stages, special interest groups try to sway the government in their favor. We find that both the choice of regime and the levels of domestic and global emissions only depend on the aggregate levels of organized stakes in all countries and not on their distribution among individual interest groups, and an increase in lobbying influence by a particular lobby group may backfire by inducing a change towards the lobby group's less preferred regime.

Keywords: non-cooperative climate policy, political economy, emissions trading, environmental awareness

JEL Classification: D72, H23, H41, Q58

Suggested Citation

Habla, Wolfgang and Winkler, Ralph, Political Influence on Non-Cooperative International Climate Policy (October 30, 2012). Journal of Environmental Economics and Management, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2168706

Wolfgang Habla

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

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

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

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