International negotiations on carbon dioxide reductions: A dynamic game model

Is there is a warming trend in the earth's climate caused by an increase in concentrations of greenhouse gases in the upper atmosphere, it may be sensible to try to slow down that process by reducing emissions of greenhouse gases and, in particular, the emissions of carbon dioxide produced by the energy sector of world economies. For a number of reasons, a consensus on such reductions is difficult to reach. In this article, we model the problem as a dynamic game with national governments, or coalitions of such governments, as players. Clearly, the negotiations on worldwide reductions in CO₂ emissions can succeed only if there exists a cooperative solution superior to the noncooperative one. According to our model, the existence of a collectively preferable cooperative solution depends on the degree of concern among national governments about negative impacts of increased CO₂ concentrations. In addition to this unsurprising conclusion, the model can provide insights as to whose concerns will count most for the success of the negotiations and who will have to be induced by side payments to participate.