Unilateral actions as signals of high damage costs: distorting pre-negotiations emissions in international environmental problems

Urs Steiner Brandt, Niels Nannerup
2013 Environmental Economics  
In multilateral negotiations between nations on problems of global pollution, associated national actions to control pollution can be seen as a complex international public good. Such actions are costly and incentives to pass the main burden of reduction to other countries therefore exist. The authors show that when governments possess private information about national damage costs, signalling through emission levels may occur, and a variety of credible actions that manipulates emissions
more » ... negotiations (or in-between different stages of negotiation) can be identified. In particular, the paper identifies that unilateral actions to reduce emissions can be explained by the desire to credibly signal high damage costs, and therefore gives an explanation for unilateral actions as strategic manipulation of emissions. These incentives arise whenever pre-agreement actions can influence the final outcome of the negotiations, through reduction demands of other countries. The implication is that unilateral actions can be seen as a credible move, in situations with private information about damage costs, and therefore a rational strategy to get progress in e.g., the climate negotiations.
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