Countries often have private information about their willingness to pay for protecting the climate system and their cost of emission reductions. We use a principal-agent model to re-examine the economic case for unilateral action by individual countries, in our case of the principal. We ?nd that...

This paper departs from the standard open-economy Ramsey model and introduces additional concerns for wealth, status and Easterlin's (2001) hypothesis that consumption changes, in particular increases, are important and not only the level. These extensions induce first of all interior steady...