Many countries are failing to comply with the non-binding commitments of the Paris Agreement, making it increasingly clear that we have to reconsider how to ensure collective action to limit global warming to less than 2°C above preindustrial levels. A new IIASA-led study supports a different approach to designing an international climate agreement that would incentivize countries to cooperate.
Although there is general consensus that global greenhouse gas emissions are too high, most governments would prefer other countries to reduce their emissions rather than reducing their own. The Paris Agreement is intended to solve this collective action problem, but according to a 2017 United Nations Environment Programme report, this landmark accord is likely insufficient. The authors of the study published in Nature Scientific Reports explored one proposed solution to this problem, namely matching-commitment agreements. In such an agreement, each country can commit to reducing its emissions by an amount that depends on the emissions reductions of other countries. Using these commitments to conditional emissions reductions allows countries to incentivize other countries to reduce their emissions.
“Much of the current discussion around international climate agreements centers on how to induce countries to accede to a global carbon price, and prevent countries who do not impose such a tax from gaining an economic advantage over those who do. One prominent approach to doing so is the “climate club” approach, which incentivizes countries to cooperate by imposing trade sanctions on those who do not. While this approach is compelling and may avoid some of the shortcomings of the Paris Agreement, its implementation would be difficult, as international-trade law would need to be amended to allow for penalties on non-participants,” explains study lead author Chai Molina, a researcher at IIASA, Princeton University, and the University of Pennsylvania. “We wanted to understand if it’s possible to incentivize countries to cooperate by using a matching-commitment agreement rather than trade sanctions or asking them to make binding commitments to unilateral actions.”
Read more at International Institute for Applied Systems Analysis
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