Flexibility mechanisms and credit discounting

Sungwhee Shin; Sang Chul Suh

doi:10.1017/S1355770X03000135

Flexibility mechanisms and credit discounting

Sungwhee Shin
, Sang Chul Suh

School of Economics

University of Windsor

Research output: Contribution to journal › Article › peer-review

2 Scopus citations

Abstract

We consider the international treaties on climate change as self-enforcing agreements. Applying non-cooperative game theory, we interpret the UN framework Convention on Climate Change as a Nash equilibrium outcome of an international abatement game where only domestic abatement is allowed. The Kyoto Protocol is a Nash equilibrium outcome of the game where flexibility mechanisms are introduced. We also show that credit discounting on foreign abatement can Pareto improve the welfare of all countries.

Original language	English
Pages (from-to)	247-260
Number of pages	14
Journal	Environment and Development Economics
Volume	8
Issue number	2
DOIs	https://doi.org/10.1017/S1355770X03000135
State	Published - May 2003

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 13 Climate Action

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10.1017/S1355770X03000135

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AB - We consider the international treaties on climate change as self-enforcing agreements. Applying non-cooperative game theory, we interpret the UN framework Convention on Climate Change as a Nash equilibrium outcome of an international abatement game where only domestic abatement is allowed. The Kyoto Protocol is a Nash equilibrium outcome of the game where flexibility mechanisms are introduced. We also show that credit discounting on foreign abatement can Pareto improve the welfare of all countries.

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DO - 10.1017/S1355770X03000135

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Flexibility mechanisms and credit discounting

Abstract

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