Collective Risk and Distributional Equity in Climate Change Bargaining1

Climate negotiations occur against the backdrop of increasing collective risk: each failure to agree on how to share the costs of climate change mitigation increases the odds of significant economic loss for the negotiating parties. Nonetheless, no existing climate bargaining model includes this characteristic feature. We introduce a novel bargaining game that incorporates collective risk, and investigate its effects in an incentivized experiment by manipulating three important distributional equity principles related to climate change: the capacity to pay for its mitigation, vulnerability to its negative effects, and responsibility for creating it. Our results suggest that greater vulnerability reduces bargaining power, but decreased capacity does not. Responsibility seems to have no independent effect on behavior. Both collective risk itself and its consequences in light of the recent events surrounding the Paris Climate Agreement make it all the more urgent to better understand this crucial feature of climate change bargaining.