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Appears in Collections:Economics Working Papers
Peer Review Status: Unrefereed
Title: Uncertainty and Climate Treaties: Does Ignorance Pay?
Author(s): Dellink, Rob
Finus, Michael
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Citation: Dellink R & Finus M (2009) Uncertainty and Climate Treaties: Does Ignorance Pay?. Stirling Economics Discussion Paper, 2009-15.
Keywords: international climate agreements
game theory
cost-benefit analysis
Environmental policy International cooperation
Environmental law, International
JEL Code(s): D62: Externalities
D80: Information, Knowledge, and Uncertainty: General
Q54: Climate; Natural Disasters and Their Management; Global Warming
Issue Date: 1-Jul-2009
Series/Report no.: Stirling Economics Discussion Paper, 2009-15
Abstract: Uncertainty and learning play an important role in addressing the problem of climate change. In stylized game-theoretic models of international environmental treaty formation, which capture the strategic interactions between nations, it has been shown that learning usually has a negative impact on the success of cooperation. This paper asks the question whether this negative conclusion carries over to an applied multiregional climate model. This model captures the large heterogeneity between different world regions and considers not only uncertainty about the benefits but also about the costs from climate mitigation. By exploiting differences in costs and benefits between regions and allowing transfers to mitigate free-rider incentives, we derive much more positive conclusions about the role of learning.
Type: Working Paper
Affiliation: Wageningen University
University of Stirling

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