A Climate Alliance through Transfer: Transfer Design in an Economic Conflict Model
For decades, combating climate change has been a global challenge, which requires jointly coordinated efforts by numerous, international actors. However, it has been shown time and again that agreeing on globally binding agreements without a global government proves difficult. To this end, this pape...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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MDPI AG
2022-02-01
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| Series: | World |
| Subjects: | |
| Online Access: | https://www.mdpi.com/2673-4060/3/1/6 |
| _version_ | 1797440697605816320 |
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| author | Marcel Franke Bernhard K. J. Neumärker |
| author_facet | Marcel Franke Bernhard K. J. Neumärker |
| author_sort | Marcel Franke |
| collection | DOAJ |
| description | For decades, combating climate change has been a global challenge, which requires jointly coordinated efforts by numerous, international actors. However, it has been shown time and again that agreeing on globally binding agreements without a global government proves difficult. To this end, this paper examines the possibility of a tolerance premium. This means a transfer payment in exchange for accepting and complying with the associated agreement. The provider of this tolerance premium determines the conditions of its payment to set desired incentives. Thus, collective decision making can also be self-enforced without a higher authority. This scenario is studied analytically based on Dixit’s conflict model. The study shows that the optimal tolerance premium depends only on the value of the prize to the transferee and that this can result in a stalling of the conflict. The implications of this model shed light on the design of global climate agreements that are self-enforcing without the need for a global government. For this purpose, the upfront payment of funds and their reimbursement as a tolerance premium serve as an incentive to comply with collectively agreed rules in climate policy. |
| first_indexed | 2024-03-09T12:13:06Z |
| format | Article |
| id | doaj.art-aea32c75572047ada14d6b98b93bae31 |
| institution | Directory Open Access Journal |
| issn | 2673-4060 |
| language | English |
| last_indexed | 2024-03-09T12:13:06Z |
| publishDate | 2022-02-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | World |
| spelling | doaj.art-aea32c75572047ada14d6b98b93bae312023-11-30T22:50:37ZengMDPI AGWorld2673-40602022-02-013111212510.3390/world3010006A Climate Alliance through Transfer: Transfer Design in an Economic Conflict ModelMarcel Franke0Bernhard K. J. Neumärker1Götz Werner Chair of Department of Economic Policy and Constitutional Economic Theory, University of Freiburg, 79098 Freiburg, GermanyGötz Werner Chair of Department of Economic Policy and Constitutional Economic Theory, University of Freiburg, 79098 Freiburg, GermanyFor decades, combating climate change has been a global challenge, which requires jointly coordinated efforts by numerous, international actors. However, it has been shown time and again that agreeing on globally binding agreements without a global government proves difficult. To this end, this paper examines the possibility of a tolerance premium. This means a transfer payment in exchange for accepting and complying with the associated agreement. The provider of this tolerance premium determines the conditions of its payment to set desired incentives. Thus, collective decision making can also be self-enforced without a higher authority. This scenario is studied analytically based on Dixit’s conflict model. The study shows that the optimal tolerance premium depends only on the value of the prize to the transferee and that this can result in a stalling of the conflict. The implications of this model shed light on the design of global climate agreements that are self-enforcing without the need for a global government. For this purpose, the upfront payment of funds and their reimbursement as a tolerance premium serve as an incentive to comply with collectively agreed rules in climate policy.https://www.mdpi.com/2673-4060/3/1/6global climate agreementconflict modelpeacecontest success functiontransferglobal government |
| spellingShingle | Marcel Franke Bernhard K. J. Neumärker A Climate Alliance through Transfer: Transfer Design in an Economic Conflict Model World global climate agreement conflict model peace contest success function transfer global government |
| title | A Climate Alliance through Transfer: Transfer Design in an Economic Conflict Model |
| title_full | A Climate Alliance through Transfer: Transfer Design in an Economic Conflict Model |
| title_fullStr | A Climate Alliance through Transfer: Transfer Design in an Economic Conflict Model |
| title_full_unstemmed | A Climate Alliance through Transfer: Transfer Design in an Economic Conflict Model |
| title_short | A Climate Alliance through Transfer: Transfer Design in an Economic Conflict Model |
| title_sort | climate alliance through transfer transfer design in an economic conflict model |
| topic | global climate agreement conflict model peace contest success function transfer global government |
| url | https://www.mdpi.com/2673-4060/3/1/6 |
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