Abstract:

This paper introduces a novel policy structure  to mitigate global carbon emissions without requiring broad multilateral cooperation. Extending Nordhaus's (2015) climate club, countries in the ``second tier'' must price carbon at a fixed fraction of the average carbon price within the first tier, or face tariffs. Tier 1 countries  abate more since doing so induces matching abatement in the second tier.  The   stable first-tier  coalition consists of the US and   EU, which optimally sets carbon prices at 60% of the global Social Cost of Carbon. The stable agreement achieves global abatement four and a half times higher than the uncoordinated Nash equilibrium and one-third of the globally efficient level.

About the SEEMS Seminars

Over the past years the number of researchers at UvA Economics & Business that work on Environmental Economics and Sustainability has increased significantly. To provide a natural meeting place for them, we have started a series of Seminars on Environmental Economics and Management of Sustainability (SEEMS).

The series’ first main goal is to increase the visibility of Environmental Economics and the Management of Sustainability at UvA and the visibility of UvA within these fields. Its second main goal is to give PhD candidates working on topics in these fields access to the frontier of knowledge, and to provide them with a training ground where they can present and discuss their ideas.

Are you interested?

This will be a hybrid seminar. If you are interested in joining this seminar, please send an email to the secretariat of ASF at asf-feb@uva.nl.