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Unpublished Paper
Incentives and Stability of International Climate Coalitions: An Integrated Assessment
Fondazione Eni Enrico Mattei Working Papers
  • Valentina Bosetti, Fondazione Eni Enrico Mattei and CMCC, Italy
  • Carlo Carraro, Fondazione Eni Enrico Mattei, University of Venice, CEPR, CESifo and CMCC, Italy
  • Enrica De Cian, Fondazione Eni Enrico Mattei and CMCC, Italy
  • Emanuele Massetti, Fondazione Eni Enrico Mattei and CMCC, Italy
  • Massimo Tavoni, Fondazione Eni Enrico Mattei and CMCC, Italy
Date of This Version
1-31-2012
Abstract
This paper analyses the incentives to participate in and the stability of international climate coalitions. Using the integrated assessment model WITCH, the analysis of coalitions’ profitability and stability is performed under alternative assumptions concerning the pure rate of time preference, the social welfare aggregator and the extent of climate damages. We focus on the profitability, stability, and “potential stability” of a number of coalitions which are “potentially effective” in reducing emissions. We find that only the grand coalition under a specific sets of assumptions finds it optimal to stabilise GHG concentration below 550 ppm CO2-eq. However, the grand coalition is found not to be stable, not even “potentially stable” even through an adequate set of transfers. However, there exist potentially stable coalitions, but of smaller size, which are also potentially environmentally effective. Depending on the assumptions made, they could achieve up to 600 ppm CO2-eq. More ambitious targets lead to the collapse of the coalition.
Citation Information
Valentina Bosetti, Carlo Carraro, Enrica De Cian, Emanuele Massetti, et al.. "Incentives and Stability of International Climate Coalitions: An Integrated Assessment" (2012)
Available at: http://works.bepress.com/carlo_carraro/5/