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The impact of Treaty nonparticipation on the Costs of Slowing Global Warming

The Impact of Treaty nonparticipation on the Costs of Slowing Global Warming William Nordhaus* One of the important features of public bads like global warming is that countries face widely disparate incentives to participate in measures to mitigate the impacts.1 In the specific case of global warming, these differences in in¥centives reflect differences in income, political structure, environmental attitudes, country size, geography, and perceptions of the eventual damage. For example, Russia may believe that it will benefit from at least limited warming, while India may believe it will suffer significant harm.2 The structures of the Framework Convention on Climate Change and the Kyoto Protocol assign very different responsibilities to high-income and low-income countries. Indeed, the Framework Convention requires only high-income countries to participate, while the Kyoto Protocol excludes major developing countries in principle and the United States in practice.3 A realistic analysis of policy toward global warming, or of any policy that involves coordination among multiple nations, must allow for differing national or sectoral rates of participation in international agreements. It is critical that analysts and policymakers understand the potential costs of allowing incom¥plete participation. Are these costs large or small? This is the question to which the present study is addressed.

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Energy Specializations: Energy and the Environment – Climate Change and Greenhouse Gases; Energy and the Environment – Policy and Regulation

JEL Codes:
Q54 - Climate; Natural Disasters and Their Management; Global Warming
E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General

Keywords: Climate change policy, Treaty nonparticipation, Kyoto protocol, CO2 emission reduction

DOI: 10.5547/ISSN0195-6574-EJ-Vol30-NoSI2-3

Published in Volume 30, Special Issue #2 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


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