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A bargaining experiment on heterogeneity and sidedeals in climate negotiations

Gosnell, Greer and Tavoni, Alessandro (2017) A bargaining experiment on heterogeneity and sidedeals in climate negotiations. Climate Change, 142 (3). pp. 575-586. ISSN 0165-0009

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Identification Number: 10.1007/s10584-017-1975-3

Abstract

The recent global climate change agreement in Paris leaves a wide gap between pledged and requisite emissions reductions in keeping with the commonly accepted 2°C target. A recent strand of theoretical and experimental evidence establishes pessimistic predictions concerning the ability of comprehensive global environmental agreements to improve upon the business-as-usual trajectory. We introduce an economic experiment focusing on the dynamics of the negotiation process by observing subjects’ behavior in a Nash bargaining game. Throughout repeated rounds, heterogeneous players bargain over the allocation of a fixed amount of profit-generating emissions with significant losses attached to prolonged failure to reach agreement. We find that the existence of side agreements that constrain individual demands among a subset of like countries does not ensure success; however, such side agreements reduce the demands of high-emission parties. Our results highlight the importance of strong signals amongst high emitters in reaching agreement to shoulder a collective emissions reduction target.

Item Type: Article
Official URL: https://link.springer.com/journal/10584
Additional Information: © 2017 The Authors © CC BY 4.0
Subjects: G Geography. Anthropology. Recreation > GE Environmental Sciences
Sets: Research centres and groups > Grantham Research Institute on Climate Change and the Environment
Date Deposited: 05 May 2017 08:56
Last Modified: 19 Jul 2017 13:32
Projects: ES/K006576/1, 1-RGI-U885
Funders: Economic and Social Research Council, Enel Foundation
URI: http://eprints.lse.ac.uk/id/eprint/75142

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