The impact of surplus sharing on the stability of international climate agreements

Hans Peter Weikard, Michael Finus, Juan Carlos Altamirano-Cabrera

Research output: Contribution to journalArticle

  • 47 Citations

Abstract

This paper analyses stability of coalitions for greenhouse gas abatement under different sharing rules applied to the gains from cooperation. We use a 12-region model to examine internal and external stability of coalitions. We determine and compare stable coalitions under different surplus sharing rules; for example, grandfathering (sharing proportional to current emissions) and a number of equitable rules, i.e. sharing according to historical responsibilities for past emissions. Due to strong free-rider incentives we find only small stable coalitions for all sharing rules examined. We observe that stable coalitions consist of regions with low marginal abatement costs that are attractive partners in any coalition and regions receiving the highest shares of the surplus from cooperation under a particular sharing rule. We find that equitable rules may not be conducive to success: in fact, a grandfathering scheme leads to the most successful coalition in terms of global abatement and global welfare.

LanguageEnglish
Pages209-232
Number of pages24
JournalOxford Economic Papers
Volume58
Issue number2
DOIs
StatusPublished - 2006

Fingerprint

Surplus sharing
Climate
Sharing rule
Abatement
Grandfathering
Surplus
Marginal abatement costs
Responsibility
Free riders
Incentives
Greenhouse gases

Cite this

The impact of surplus sharing on the stability of international climate agreements. / Weikard, Hans Peter; Finus, Michael; Altamirano-Cabrera, Juan Carlos.

In: Oxford Economic Papers, Vol. 58, No. 2, 2006, p. 209-232.

Research output: Contribution to journalArticle

Weikard, Hans Peter ; Finus, Michael ; Altamirano-Cabrera, Juan Carlos. / The impact of surplus sharing on the stability of international climate agreements. In: Oxford Economic Papers. 2006 ; Vol. 58, No. 2. pp. 209-232.
@article{45275b77d7904e77a167cc55bef13172,
title = "The impact of surplus sharing on the stability of international climate agreements",
abstract = "This paper analyses stability of coalitions for greenhouse gas abatement under different sharing rules applied to the gains from cooperation. We use a 12-region model to examine internal and external stability of coalitions. We determine and compare stable coalitions under different surplus sharing rules; for example, grandfathering (sharing proportional to current emissions) and a number of equitable rules, i.e. sharing according to historical responsibilities for past emissions. Due to strong free-rider incentives we find only small stable coalitions for all sharing rules examined. We observe that stable coalitions consist of regions with low marginal abatement costs that are attractive partners in any coalition and regions receiving the highest shares of the surplus from cooperation under a particular sharing rule. We find that equitable rules may not be conducive to success: in fact, a grandfathering scheme leads to the most successful coalition in terms of global abatement and global welfare.",
author = "Weikard, {Hans Peter} and Michael Finus and Altamirano-Cabrera, {Juan Carlos}",
year = "2006",
doi = "10.1093/oep/gpi047",
language = "English",
volume = "58",
pages = "209--232",
journal = "Oxford Economic Papers",
issn = "1464-3812",
publisher = "Oxford University Press",
number = "2",

}

TY - JOUR

T1 - The impact of surplus sharing on the stability of international climate agreements

AU - Weikard, Hans Peter

AU - Finus, Michael

AU - Altamirano-Cabrera, Juan Carlos

PY - 2006

Y1 - 2006

N2 - This paper analyses stability of coalitions for greenhouse gas abatement under different sharing rules applied to the gains from cooperation. We use a 12-region model to examine internal and external stability of coalitions. We determine and compare stable coalitions under different surplus sharing rules; for example, grandfathering (sharing proportional to current emissions) and a number of equitable rules, i.e. sharing according to historical responsibilities for past emissions. Due to strong free-rider incentives we find only small stable coalitions for all sharing rules examined. We observe that stable coalitions consist of regions with low marginal abatement costs that are attractive partners in any coalition and regions receiving the highest shares of the surplus from cooperation under a particular sharing rule. We find that equitable rules may not be conducive to success: in fact, a grandfathering scheme leads to the most successful coalition in terms of global abatement and global welfare.

AB - This paper analyses stability of coalitions for greenhouse gas abatement under different sharing rules applied to the gains from cooperation. We use a 12-region model to examine internal and external stability of coalitions. We determine and compare stable coalitions under different surplus sharing rules; for example, grandfathering (sharing proportional to current emissions) and a number of equitable rules, i.e. sharing according to historical responsibilities for past emissions. Due to strong free-rider incentives we find only small stable coalitions for all sharing rules examined. We observe that stable coalitions consist of regions with low marginal abatement costs that are attractive partners in any coalition and regions receiving the highest shares of the surplus from cooperation under a particular sharing rule. We find that equitable rules may not be conducive to success: in fact, a grandfathering scheme leads to the most successful coalition in terms of global abatement and global welfare.

UR - http://dx.doi.org/10.1093/oep/gpi047

U2 - 10.1093/oep/gpi047

DO - 10.1093/oep/gpi047

M3 - Article

VL - 58

SP - 209

EP - 232

JO - Oxford Economic Papers

T2 - Oxford Economic Papers

JF - Oxford Economic Papers

SN - 1464-3812

IS - 2

ER -