Conference Agenda

Negative Emissions Technologies (NETs) --- a range of methods to remove carbon dioxide from the atmosphere--- are a crucial innovation in meeting temperature targets set by international climate agreements. However, mechanisms which undo the adverse consequences of short-sighted actions (as NETs) can fuel substitution effects and crowd out virtuous behaviors (e.g., mitigation efforts). For this reason, the impact of NETs on environmental preservation is an open question among scientists and policy-makers. We model this problem through a novel restorable common-pool resource game and use a laboratory experiment to exogenously manipulate key features of NETs and assess their consequences. We show that crowding out only emerges when NETs are surely available and cheap. The availability of NETs does not allow experimental communities to either conserve the common resource for longer or accrue higher earnings and makes the earnings distribution more unequal.

We study the design of international agreements to abate marine plastic pollution (UNEP 2022). First, we use data of 120 countries from across the globe to derive an efficient abatement policy that maximises collective welfare. Second, we find that the efficient policy is both unfair (poor countries bear the costs whilst rich countries reap the benefits) and unstable (some countries would be better off without it). We therefore construct compensation schemes that produce efficient, fair and stable (E-FAST) agreements. Third, we test the robustness of the model with empirical cost data.

Conditional cooperation, i.e., the willingness to contribute to a public good as long as others contribute, is usually studied using a variant of the strategy-method in public good game experiments. Here, we take an alternative approach. We rely on a non-standard binary linear public good game in which a player’s ultimate decision to contribute is contingent on the number of other players s/he wants to see contribute in order for her/him to do so. Thus, in this version of the game, there is an association between the number of strategies available to each player and the total number of players. We study the prevalence of conditional cooperation in this framework in a laboratory experiment by exogenously varying the group size. Relative to the control treatment, in which subjects have no conditional strategies, we documented an increase in cooperation when subjects are able to condition their decisions to cooperate. Also, the smaller the group size, the higher the level of cooperation. Moreover, the conditional cooperation strategies allow cooperation to be stable over the time periods we defined. Finally, we consider the potential implications of our findings in the context of climate change agreements. Stable institutional arrangements for international cooperation to reduce greenhouse gas emissions can be strengthened by a conditional cooperation strategy that satisfies all interested parties.

Facing an uncertain tipping point, countries can either mitigate the risk of disaster or invest in adaptation to lower the impact of disaster. However, the possibility to adapt can affect incentives to free-ride in mitigation by other countries, as mitigation is a public good and adaptation is a private good. We model this tradeoff in a non-linear pollution game where countries face an endogenous regime shift and are able to invest in adaptive capital to reduce the impact of disaster. We study a social planner outcome and a non-cooperative outcome where each country uses Markov Perfect Strategies. Our findings are threefold. First, mitigation efforts are reduced by the possibility to adapt, but this reduction is larger in a non-cooperative than a cooperative outcome. Second, free-riding becomes more intense when either the impact of the disaster or the sensitivity of the hazard rate to pollution stock increases. Third, the gains from coordinating cooperation increase heavily when adaptation becomes present.