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A bargaining experiment on heterogeneity and side deals in climate negotiations

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  • Greer Gosnell
  • Alessandro Tavoni
Abstract
The recent global climate change agreement in Paris leaves a wide gap between pledged and requisite emissions reductions in keeping with the commonly accepted 2°C target. A recent strand of theoretical and experimental evidence establishes pessimistic predictions concerning the ability of comprehensive global environmental agreements to improve upon the business-as-usual trajectory. We introduce an economic experiment focusing on the dynamics of the negotiation process by observing subjects’ behavior in a Nash bargaining game. Throughout repeated rounds, heterogeneous players bargain over the allocation of a fixed amount of profit-generating emissions with significant losses attached to prolonged failure to reach agreement. We find that the existence of side agreements that constrain individual demands among a subset of like countries does not ensure success; however, such side agreements reduce the demands of high-emission parties. Our results highlight the importance of strong signals amongst high emitters in reaching agreement to shoulder a collective emissions reduction target.

Suggested Citation

  • Greer Gosnell & Alessandro Tavoni, 2016. "A bargaining experiment on heterogeneity and side deals in climate negotiations," GRI Working Papers 249, Grantham Research Institute on Climate Change and the Environment.
    • Handle: RePEc:lsg:lsgwps:wp249
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    References listed on IDEAS

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    Cited by:

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    2. Alessandro Del Ponte & Aidas Masiliūnas & Noah Lim, 2023. "Information about historical emissions drives the division of climate change mitigation costs," Nature Communications, Nature, vol. 14(1), pages 1-8, December.
    3. Goeschl, Timo & Soldà, Alice, 2024. "(Un)Trustworthy pledges and cooperation in social dilemmas," Journal of Economic Behavior & Organization, Elsevier, vol. 223(C), pages 106-119.
    4. Yu-Hsuan Lin, 2018. "How social preferences influence the stability of a climate coalition," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 0(2), pages 151-166.
    5. Piotr Żebrowski & Ulf Dieckmann & Åke Brännström & Oskar Franklin & Elena Rovenskaya, 2022. "Sharing the Burdens of Climate Mitigation and Adaptation: Incorporating Fairness Perspectives into Policy Optimization Models," Sustainability, MDPI, vol. 14(7), pages 1-24, March.
    6. Aseem Mahajan & Reuben Kline & Dustin Tingley, 2022. "Collective Risk and Distributional Equity in Climate Change Bargaining," Journal of Conflict Resolution, Peace Science Society (International), vol. 66(1), pages 61-90, January.

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