The Value of International Cooperation for Abating Global Climate Change

RESOURCE AND ENERGY ECONOMICS

Posted: 8 Oct 1996

Abstract

Abatement of global climate change is modeled as a two-period game between the industrialized "North" and developing "South." Using an integrated-assessment model to simulate the economic and environmental consequences of alternative abatement policies, cooperative and Nash solutions are identified. Across a wide variety of games, incorporating alternative values of physical and economic parameters, the Nash solution achieves most of the benefits of the cooperative solution, relative to the case where neither region acts to abate climate change. Similarly, when parameter values are uncertain in the first period (1990- 2010) but become known by the second period (2010-2100), the Nash solution achieves most of the benefits of global cooperation. In contrast to the results of globally aggregated analysis, in which a 20-year delay in abatement imposes small costs, most of the benefits of cooperation are lost if the regions delay cooperation until the second period.

JEL Classification: C72, H41, Q28

Suggested Citation

Hammitt, James K. and Adams, John L., The Value of International Cooperation for Abating Global Climate Change. RESOURCE AND ENERGY ECONOMICS. Available at SSRN: https://ssrn.com/abstract=4297

James K. Hammitt (Contact Author)

Harvard University ( email )

718 Huntington Avenue
Boston, MA 02115
United States
617-432-4343 (Phone)
617-432-0190 (Fax)

John L. Adams

RAND Corporation ( email )

P.O. Box 2138
1776 Main Street
Santa Monica, CA 90407-2138
United States

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