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Appears in Collections:Economics Working Papers
Peer Review Status: Unrefereed
Title: The Role of Uncertainty and Learning for the Success of International Climate Agreements
Author(s): Finus, Michael
Pintassilgo, Pedro
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Citation: Finus M & Pintassilgo P (2009) The Role of Uncertainty and Learning for the Success of International Climate Agreements. Stirling Economics Discussion Paper, 2009-16.
Keywords: cooperation
climate change
self-enforcing agreements
Climate changing
Environmental policy International cooperation
Climatic changes International cooperation
JEL Code(s): C72: Noncooperative Games
D62: Externalities
D81: Criteria for Decision-Making under Risk and Uncertainty
H41: Public Goods
Q20: Renewable Resources and Conservation: General
Issue Date: 1-Aug-2009
Series/Report no.: Stirling Economics Discussion Paper, 2009-16
Abstract: Technological developments intensify linkages between nations, making unilateral policies less effective. Though transnational externalities (e.g. trade, contagious diseases and terrorism) warrants coordination and cooperation between governments, this proves some times difficult. This is particularly true for international environmental agreements. One reason for meager success is the public good character of environmental protection encouraging free-riding. Another reason one might suspect are the large uncertainties surrounding most environmental problems, and in particular climate change, providing sufficient excuse to remain inactive. Paradoxically, some recent papers have concluded just the opposite: the veil of uncertainty can be conducive to the success of international environmental cooperation. This sheds serious doubts on the benefits from research on better understanding environmental impacts. In this paper, we explain why and under which conditions such a pessimistic conclusion can be true. However, taking a broader view, we argue that these unfavorable conditions are rather an exception than the rule. Most important, we suggest a mechanism that mitigates the negative effect of learning and which may even turn it into a positive effect. Our results apply beyond the specifics of climate change to similar problems of cooperation in the presence of externalities.
Type: Working Paper
Affiliation: University of Algarve

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