Climate Clubs: Overcoming Free-riding in International Climate Policy †

By William Nordhaus. 2015

1,065 citations recorded by the source corpus.

Notwithstanding great progress in scientific and economic under standing of climate change, it has proven difficult to forge inter national agreements because of free-riding, as seen in the defunct Kyoto Protocol. This study examines the club as a model for international climate policy. Based on economic theory and empirical modeling, it finds that without sanctions against non-participants there are no stable coalitions other than those with minimal abatement. By contrast, a regime with small trade penalties on non-participants, a Climate Club, can induce a large stable coalition with high levels of abatement. (JEL Q54, Q58, K32, K33)

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/ec2c2ca637ca001aec93735ee059880e00c72fc7

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

Citations in the corpus

Modelling innovation and the macroeconomics of low-carbon transitions: theory, perspectives and practical use (2019, background): “Significant debate exists on strategies for achieving an efficient and cost-effective sustainable energy transition (Edenhofer et al., 2010; IPCC, 2014b; Kriegler et al., 2014; Nordhaus, 2010; Nordhaus, 2015; Rogelj et al., 2015; Rogelj et al., 2018; Stern, 2007).”
Trade Wars and Trade Talks with Data (2014, positive): “28 The trade elasticities are the partial equilibrium elasticities of trade flows with respect to trade costs and equal 1 − σ s here. Simonovska and Waugh (2014) obtain their results in the context of an Eaton and Kortum (2002) model, which means that their results do not exactly apply here.”
Redefining green growth within planetary boundaries (2018, background): “Another approach is for nations to join in ‘climate clubs’ by applying a common, substantial carbon border tax on the trade of resource-intensive goods (Nordhaus, 2015).”
Governing global problems under uncertainty: making bottom-up climate policy work (2017, background): “…countries (Potoski and Prakash 2005; Potoski and Prakash 2009; Carbone et al. 2009; Hoffmann 2011; Urpelainen 2013; Hovi et al. 2014; Victor 2015; Nordhaus 2015), decentralized policy efforts launched within national governments (Rabe 2008) or particular pollutants, such as soot (Wallack and…”
Proposal for an International Carbon Price Floor Among Large Emitters (2021, background): “The proposal shares some features of the “Climate Club” suggested in Nordhaus (2015) where a coalition of willing countries would implement a common carbon price while imposing a general tariff on nonparticipants.”
The misallocation of climate research funding (2020, background): “But many social science ideas and solutions related to the mitigation of climate change have already been put forth, such as climate clubs, carbon taxes, or grassroots mobilization [25,26].”
The Economic Geography of Global Warming (2021, background): “As in Nordhaus (2015), we could alternatively assume that preventing a share ν t ( r ) of CO 2 emissions in region r at period t costs a fraction, ( 1 − " 1 , t ( r ) · ν t ( r ) 2 ) , of household’s income.”
Complexity and the Economics of Climate Change: A Survey and a Look Forward (2017, neutral): “by Nordhaus (1992). These models are mainly concerned with cost-benefit assess-”
On the Economics of a Carbon Tax for the United States (2019, positive): “This could be combined with the Nordhaus (2015) “climate club” idea.”
Innovation, growth and the transition to net-zero emissions (2021, neutral): “27 See, for example, Nordhaus (2015).”
Job losses and political acceptability of climate policies: why the ‘job-killing’ argument is so persistent and how to overturn it (2018, background): “However, because trade policies are difficult to overturn unilaterally (Nordhaus, 2015)8, environmental regulations are an easier target to satisfy the increased demand for protection, further amplifying the ‘jobkilling’ argument.”
UNFCCC before and after Paris – what's necessary for an effective climate regime? (2017, background): “And finally, the necessity of measures to safeguard the competitiveness of the participating countries’ industrial sector needs to be explored, whether or not, for example, a carbon border adjustment is required (c.f. Frankel, 2009; Nordhaus, 2015).”
Negotiating effective institutions against climate change (2015, positive): “ Nordhaus (2015) examines the formation of stable climate coalitions when coalitions are able to impose internally a uniform carbon price together with uniform trade sanctions against non‐ participants.”
Robust policies to mitigate carbon leakage (2017, background): “On the other hand, Nordhaus (2015) argues that trade penalties can induce countries to join a “Climate Club” (see also Helm and Schmidt, 2015, and Böhringer et al., 2016).”