Intergenerational Games with Dynamic Externalities and Climate Change Experiments

Games with Dynamic Externalities and Climate Change Experiments

We report on laboratory experiments with series of games with dynamic externalities, where the current actions of each player affect not only the player’s payoff today, but also the group payoffs levels of the game that will be played tomorrow. The motivating example is the climate change problem, where welfare opportunities (payoff levels) in the present depend on the stock of greenhouse gases...

Intergenerational Justice and Climate Change EDWARD

Risk Aversion, Intergenerational Equity and Climate Change

The paper investigates a climate-economy model with an iso-elastic welfare function in which one parameter γ measures relative risk-aversion and a distinct parameter ρ measures resistance to intertemporal substitution. We show both theoretically and numerically that climate policy responds differently to variations in the two parameters. In particular, we show that higher γ but lower ρ leads to...

Climate change as an intergenerational problem.

Predicting climate change is a high priority for society, but such forecasts are notoriously uncertain. Why? Even should climate prove theoretically predictable—by no means certain—the near-absence of adequate observations will preclude its understanding, and hence even the hope of useful predictions. Geological and cryospheric records of climate change and our brief recent record of instrument...

Games of Climate Change with International Trade

We analyse games of greenhouse gas emission reduction in which the emissions and the emission reduction costs of one country depend on other countries’ emission abatement. In an analytically tractable model, we show that international trade effects on costs and emissions can either increase or decrease incentives to reduce emissions and to cooperate on emission abatement; in some specifications...