Cooperation and Competition in Climate Change Policies: Mitigation and Climate Engineering when Countries are Asymmetric
Vassiliki Manoussi and Anastasios Xepapadeas, Athens University of Economics and Business, Department of International and European Economic Studies
CLIMATE CHANGE, MITIGATION, SOLAR RADIATION MANAGEMENT, COOPERATION, DI¤ERENTIAL GAME, ASYMMETRY, FEEDBACK NASH EQUILIBRIUM.
We study a dynamic game of climate policy design in terms of emissions and
solar radiation management (SRM) involving two heterogeneous regions or
countries. Countries emit greenhouse gasses (GHGs), and can block incom-
ing radiation by unilateral SRM activities, thus reducing global temperature.
Heterogeneity is modelled in terms of the social cost of SRM, the environ-
mental damages due to global warming, the productivity of emissions in
terms of generating private bene?ts, the rate of impatience, and the private
cost of geoengineering. We determine the impact of asymmetry on mitiga-
tion and SRM activities, concentration of GHGs, and global temperature,
and we examine whether a tradeo¤ actually emerges between mitigation
and SRM. Our results could provide some insights into a currently emerging
debate regarding mitigation and SRM methods to control climate change,
especially since asymmetries seem to play an important role in a¤ecting
incentives for cooperation or unilateral actions.