Conference Agenda

This paper explores climate negotiations among politicians, focusing on how politicians' short-term outlook or overoptimistic view influence coalition formation. Such characteristics of politicians are sources of domestic polarisation with legislators, representing mindset of future generations who implement climate policies of signatories. By modelling coalition formation as a sequential bargaining game among politicians who take into account the consequences of their membership decisions on other countries, the paper examines how the resulted domestic pressure between politicians and legislators can shape coalitional outcomes.

When accounting for the domestic polarisation, we show that politicians can only form smaller, less ambitious coalitions. However, we introduce a potential for broader cooperation where the politicians can agree on formation of overarching agreements where equal-sized coalitions of countries are linked with each other. Both domestic pressure and possibility of proposing overarching agreements are needed for achieve Pareto-improving outcomes. We introduce an algorithm to fully characterise the equilibrium coalitional structures.

We analyze "lineages" of International Environmental Agreements (IEAs), defined as sets of protocols and amendments that modify or extend the original agreement. Technically, we integrate multilateral bargaining with endogenous outside options into a gradual coalition-formation process. Focusing on pure strategies, the multiplicity of equilibria in the one-shot game is exacerbated, yielding multiple potential paths of gradual coalition formation. However, the outcome of the process can be determined: a small coalition if coalitions are reversible, the grand coalition if they are irreversible, and intermediate coalition sizes when they are partially reversible. The distribution of the surplus within the coalition converges to the Nash Bargaining Solution in some equilibria but, unexpectedly, not in all. Considering gradual coalition formation and completely mixed strategies yields a unique equilibrium path, implying a slow expansion of the coalition. Along all equilibrium paths, the coalition gradually expands in the number of participants and the ambition per participant, two features observed in many lineages of IEA.

We study how the scope of international agreements shapes environmental policy coordination and participation when pollution arises from emissions-intensive production and damages are transboundary. Using a tractable theoretical model with endogenous environmental policy choice and stable agreement formation, we compare shallow agreements that liberalize trade with deep agreements that also coordinate environmental regulation. Deeper coordination improves environmental efficiency by reducing inefficient policy substitution across instruments, but it can raise participation costs for pollution-intensive producers. As a result, deeper agreements reshape the composition of cooperation without necessarily expanding participation and may induce exclusion or self-exclusion even when coordination is welfare improving. The analysis highlights participation constraints as a central consideration in the design of trade-linked environmental cooperation.

We develop a trade-theoretic model of strategic Solar Radiation Management (SRM) in a dynamic setting with tariff policy. Two blocs of countries interact repeatedly, choosing SRM intensity and import tariffs. Although unilateral SRM is feasible and can generate a free-driver problem, linking trade policy to SRM restraint enables self-enforcing outcomes that sustain free trade and disciplined SRM deployment. We characterize the trigger level of SRM that aligns incentives and show how the enforceable cap depends on preference heterogeneity, trade gains, punishment severity, and patience. A transparent calibration, mapping blocs to a cooler, richer North and a hotter, poorer South, illustrates the mechanism. For empirically plausible trade stakes and sufficient patience, the threat of trade retaliation can substantially curb over-cooling incentives; when punishment is weak or actors are impatient, trade leverage fails. Overall, trade retaliation emerges as a conditional governance mechanism for SRM, distinct from counter-geoengineering, and clarifies when a trade-based “climate club” can discipline SRM deployment.