INTERNATIONAL NEGOTIATIONS ON CARBON-DIOXIDE REDUCTIONS - A DYNAMIC GAME MODEL

If there is a warming trend in the earth's climate caused by an increa se in concentrations of ''greenhouse gases'' in the upper atmosphere, it may be sensible to try to slow down that process by reducing emissi ons of greenhouse gases and, in particular, the emissions of carbon di oxide produced by the energy sector of world economies. For a number o f reasons, a consensus on such reductions is difficult to reach. In th is article, we model the problem as a dynamic game with national gover nments, or coalitions of such governments, as players. Clearly, the ne gotiations on worldwide reductions in CO2 emissions can succeed only i f there exists a cooperative solution superior to the noncooperative o ne. 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 insig hts as to whose concerns will count most for the success of the negoti ations and who will have to be induced by side payments to participate .