Global warming as an asymmetric public bad
Louis-Gaëtan Giraudet  1@  , Céline Guivarch  1@  
1 : CIRED
CIRED

We extend the canonical dynamic game of global warming to capture three stylized facts: (i) while most countries are expected to suffer damages, some might enjoy short-term benefits; (ii) countries' exposure to impacts bears little relation to their mitigation capabilities; (iii) some adaptation technologies, such as air conditioning, may exacerbate warming. These various sources of asymmetry add free driving to the classical free riding problem. This opens up possibilities for excessive mitigation in a non-cooperative regime. Moreover, it restricts the possibilities of Pareto improvements without transfers. Finally, it can provide a rationale for differentiating Pigouvian prices across countries.


Online user: 2