Can Climate Clubs and Community-Based Initiatives overcome International Free-Riding to Reduce Global Greenhouse Gas Emissions?


How Idealism, Expressed in Concrete Steps, Can Fight Climate Change (Robert J. Shiller, New York Times, Mar. 29, 2015)

Also discussed here: A Polycentric Approach for Coping with Climate Change (56 page pdf, Elinor Ostrom, Policy Research Working Paper 5095, Background Paper to the 2010 World Development Report, The World Bank, Oct. 2009)

And here: Climate Clubs: Designing a Mechanism to Overcome Free-Riding in International Climate Policy (51 min webcast video, American Economic Association Presidential Address, William Nordhaus, Jan. 4, 2015)

Today we review two ideas that will overcome the last of four key aspects of climate change: climate science (mature and known), costs to reduce emissions (known), economic instruments to implement policy (carbon tax, cap and trade, known), system to prevent international free-riding (zero progress). Free-riding avoids the costs of implementing change while benefiting international from the actions of the few nations who do take action at cost to themselves. Little global leadership is seen in the failed attempts to reduce global GHG emissions and even when countries pledge to reduce emissions, dropping out of that pledge brought no penalties or sanctions to the partner that exits- as seen by the decision of the Canadian government to drop out of its Kyoto Protocol commitment in 2011.

Two proposals are now on the table and involve starting at the community level or small group of participating countries and then expanding these as progress is made. Climate Clubs is a top-down treaty with penalties for non-participants (such as tariffs for imports into climate club regions) which can lead to high participation with high abatement The Community approach, introduced at the 2009 UN Climate Conference in Copenhagen (notably the world’s first carbon neutral capital), is based on action at the individual or community level where benefits can be more clearly seen and costs are less than through changes at the national or international level. Both avoid the problem of free-riding. cycling for cl ch To see Key Quotes and Links to key reports about this post, click HERE

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