Theoretical analysis and empirical evidence show that leadership behavior in climate policy through increased abatement efforts or international transfers cannot be expected to be very successful. In this paper we instead show that pioneering activities, which are based on green technological...

International climate negotiations take place in a setting where uncertainties regarding the impacts of climate change are very large. In this paper, we examine the influence of increasing the probability and impact of large climate change damages, also known as the 'fat tail', on the formation...

That climate policies are costly is evident and therefore often creates major fears. But the alternative (no action) also has a cost. Mitigation costs and damages incurred depend on what the climate policies are; moreover, they are substitutes. This brings climate policies naturally in the realm...

Climate is a persistent asset, bar none: changes in climate-related stocks have consequences spanning over centuries or possibly millennia to the future. To reconcile the discounting of such far-distant impacts and realism of the shorter-term decisions, we consider hyperbolic time-preferences in...

This paper considers investments in cost-reducing technology in the context of contributions to climate protection. Contributions to mitigating climate change are analyzed in a two-period model where later contributions can be based on better information, but delaying the contribution to the...

We study optimal climate policy in a global economy where regions differ in wealth and climate vulnerability. Carbon emissions from production lead to output losses, and there is a technology for emissions absorption. We provide an aggregation result: the model with heterogeneity can be cast...

We consider a model where agents differ in their ‘types’ which determines their voluntary contribution towards a public good. We analyze what the equilibrium composition of groups are under centralized and centralized choice. We show that there exists a top-down sorting equilibrium i.e. an...

Many poor countries are ill-adapted to the current leave alone a changing future climate, because they lack the necessary financial means to invest in efficient and cost-effective safeguarding measures. International endeavours to fund institutions, such as the Green Climate Fund, to provide...

According to the Framework Convention on Climate Change, global collective action is needed to stabilize "greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous [our emphasis] anthropogenic interference with the climate system." The Framework Convention thus...