Economics and Climate Change

Shanta Devarajan has doubts about the developing countries’ positions on climate change.

if one country takes the lead in reducing GHG emissions, the resulting equilibrium leaves the other country worse off.  Yet this is what India and other developing countries are asking for: that the developed countries first reduce their emissions and not expect the poorer countries to reduce theirs until later.

The Game Theoretic results show

that some of the standard positions of developing countries may end up leaving them worse off should at least make us think through the logic of these positions, and ensure that the type of effects captured by these models don’t undermine the interests of poor countries.

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