Climate and Trade Policy

Climate and Trade Policy

Bottom-up Approaches Towards Global Agreement

ESRI Studies Series on the Environment

Edited by Carlo Carraro and Christian Egenhofer

The difficulty of achieving and implementing a global climate change agreement has stimulated a wide range of policy proposals designed to favour the participation of a large number of countries in a global cooperative effort to control greenhouse gas emissions. This significant book analyses the viability of controlling climate change through a set of regional or sub-global climate agreements rather than via a global treaty.

Chapter 6: Bottom-up Approaches to Climate Change Control: Some Policy Conclusions

Carlo Carraro and Christian Egenhofer

Subjects: asian studies, asian economics, economics and finance, asian economics, environmental economics, environment, asian environment, climate change, environmental economics, environmental law, law - academic, environmental law


Carlo Carraro and Christian Egenhofer Climate change control is a public good and, as is well known, the provision of public goods is fundamentally undermined by a free-riding problem. A global agreement to reduce greenhouse gas (GHG) emissions is therefore very unlikely. In addition, in the case of climate change control, the presence of large asymmetries among countries and of important uncertainties on the impacts of climate change, the long time horizon and the consequent crucial role of the discount factor, and the presence of irreversibilities, reduce even further the probability of achieving a global climate agreement. This is why actors in the climate negotiation process should pay more attention to the basic incentives that countries face when negotiating on future strategies to reduce GHG emissions. As discussed in Chapter 2 of this book, these incentives do not lead to a global agreement, but rather to a set of regional or local or sub-global partial agreements. This analytical conclusion is consistent with the recent evolution of negotiations on climate change control and is also consistent with negotiations on other important issues like free trade (Chapter 4) and European integration (Chapter 3). Then the main questions of this book. Can these regional or sub-global agreements effectively reduce GHG emissions? Is this reduction sufficient to control climate change? How can regional or, more generally, sub-global agreements contribute to reach a global agreement? The previous five chapters of this book could not answers all the above questions. Nevertheless, they provide some...

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