Leadership in Climate Policy: Is There a Case for Early Unilateral Unconditional Emission Reductions?

35 Pages Posted: 30 Jul 2013

See all articles by Gunnar S. Eskeland

Gunnar S. Eskeland

Norwegian School of Economics (NHH) - Department of Business and Management Science; Foundation for Research in Economics and Business Administration

Date Written: June 14, 2013

Abstract

One may misread economic theory on climate policy to provide a warning against unilateral mitigation. While important lessons are drawn from ‘global problems require global solutions,’ these say little about what to do in a phase before or without a global agreement - or with weak ones. In the literature on cooperation and leadership in provision of public goods, early provision may stimulate provision from others. A key to leadership is signaling; an early mover has private information and is motivated in part by knowing that others will follow. Others will follow if they understand that the early mover demonstrates that emission reductions are feasible and adoptable. Our analysis finds that early movers will be cognizant of what they need to demonstrate, and they will be concerned about and act on carbon leakage. Leadership can be deterred by concerns for free riding, but this is more likely for a country or coalition that is large in terms of emissions and face others who are both large and vulnerable to climate change. We suggest leadership is possible early in this century: numbers indicate that few - if any - need find themselves deterred from early action of some sort.

Keywords: Climate policy, unilateral mitigation

JEL Classification: Q00, Q50, Q54

Suggested Citation

Eskeland, Gunnar S., Leadership in Climate Policy: Is There a Case for Early Unilateral Unconditional Emission Reductions? (June 14, 2013). NHH Dept. of Business and Management Science Discussion Paper No. 2013/6, Available at SSRN: https://ssrn.com/abstract=2295963 or http://dx.doi.org/10.2139/ssrn.2295963

Gunnar S. Eskeland (Contact Author)

Norwegian School of Economics (NHH) - Department of Business and Management Science ( email )

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Bergen, NO-5045
Norway
+4755959699 (Phone)

Foundation for Research in Economics and Business Administration ( email )

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Bergen, N-5045
Norway
+47 55959699 (Phone)

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