LEADERSHIP IN CLIMATE CHANGE MITIGATION: CONSEQUENCES AND INCENTIVES. (21st March 2017)

• Record Type: Journal Article
• Authors: Schwerhoff, Gregor; Kornek, Ulrike; Lessmann, Kai; Pahle, Michael
• Is Part Of: Journal of economic surveys. Volume 32:Number 2(2018)
• Page Start: 491
• Page End: 517
• Publication Date: 2017-03-21
• Subjects: Game theory -- Leadership -- Unilateral climate policy; Economics -- Periodicals; 330
• DOI: 10.1111/joes.12203
• Languages: English
• ISSNs: 0950-0804

Abstract

Abstract: Initiatives in favor of unilateral action on climate change are frequently challenged by concerns over free riding. Nevertheless, we observe an increasing number of unilateral efforts at different administrative levels and in different parts of the world. Previous academic literature described various individual mechanisms where emissions abroad may increase or decrease as a reaction to unilateral emission reductions. In this paper, we collect a comprehensive set of both positive and negative reactions and analyze them in stylized models. This allows us to identify the most important characteristics that determine the potential of a leader to boost mitigation efforts abroad. We find that this potential depends on (i) a strong ability to generate knowledge through leadership, (ii) a high degree of credibility in the international community, and (iii) a similar economic structure to the most important emitters. While most effects are difficult to quantify, this comprehensive assessment suggests that leakage effects resulting from unilateral mitigation may well be outweighed by positive reactions.