Governing Climate Geoengineering: Side-Payments Are Not Enough

61 Pages Posted: 22 Feb 2021

See all articles by Riccardo Ghidoni

Riccardo Ghidoni

University of Milano-Bicocca - Department of Economics, Management & Statistics; Tilburg University - Department of Economics

Valentina Bosetti

Bocconi University; CMCC - Euro Mediterranean Centre for Climate Change

Massimo Tavoni

affiliation not provided to SSRN

Anna Abatayo

affiliation not provided to SSRN

Marco Casari

University of Bologna - Department of Economics

Date Written: February 22, 2021

Abstract

Climate geoengineering strategies can help reduce the economic and ecological impacts of global warming. However, governing geoengineering is challenging: since climate preferences vary across countries, excessive deployment relative to the socially optimal level is likely. Through a laboratory experiment on a public good-or-bad game, we study whether side-payments can address this governance problem. While theoretically effective, our experimental results show only a modest impact of side-payments on outcomes, especially in a multilateral setup. Replacing unstructured bilateral exchanges with a treaty framework simplifies the action space and performs moderately better.

Keywords: climate governance, public good-or-bad, free-driving, transfers, promises, experi- ment, Coase theorem

JEL Classification: C70, C90, H40, Q50

Suggested Citation

Ghidoni, Riccardo and Bosetti, Valentina and Tavoni, Massimo and Abatayo, Anna and Casari, Marco, Governing Climate Geoengineering: Side-Payments Are Not Enough (February 22, 2021). University of Milan Bicocca Department of Economics, Management and Statistics Working Paper No. 461, Available at SSRN: https://ssrn.com/abstract=3790706

Riccardo Ghidoni (Contact Author)

University of Milano-Bicocca - Department of Economics, Management & Statistics ( email )

Piazza dell’Ateneo Nuovo 1, 20126 Milano
Milano, 20126
Italy

HOME PAGE: http://https://www.unimib.it/riccardo-ghidoni

Tilburg University - Department of Economics ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Valentina Bosetti

Bocconi University

Via Gobbi 5
Milan, 20136
Italy

CMCC - Euro Mediterranean Centre for Climate Change

via Augusto Imperatore, 16
Lecce, I-73100
Italy

Massimo Tavoni

affiliation not provided to SSRN

Anna Abatayo

affiliation not provided to SSRN

Marco Casari

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

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