Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/263698 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 9768
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper studies the formation of international climate coalitions by heterogeneous countries. Countries rationally predict the consequences of their membership decisions in climate negotiations. We offer an approach to characterise the equilibrium number of coalitions and their number of signatories independent of their heterogeneity, and we suggest a tractable algorithm to fully characterise the equilibrium. In a dynamic game analysis of a general equilibrium model of the economy integrated with climate dynamics, a grand climate coalition or multiple climate coalitions may form in equilibrium, but if the policymakers are patient, the number of signatories in all climate treaties is a Tribonacci number. Our results are robust to the possibility of renegotiation and investment in green technologies besides fossil fuels.
Subjects: 
climate economics
international environmental agreements
coalition formation
heterogeneous countries
integrated assessment models
JEL: 
Q54
D70
D50
Document Type: 
Working Paper
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