We examine the formation of multilateral, hub-and-spoke and bilateral international R&D strategic alliances (overlapping climate clubs) to reduce CO2 emissions. R&D provision in clubs produces two types of positive externalities: a global public good (i.e., reduction of CO2 emissions) and...

We examine the formation of multilateral, hub-and-spoke and bilateral international R&D strategic alliances (overlapping climate clubs) to reduce CO2 emissions. R&D provision in clubs produces two types of positive externalities: a global public good (i.e., reduction of CO2 emissions) and...

This chapter argues that the Kyoto Protocol to the Framework Convention on Climate Change (UNFCCC) was doomed to face difficulties ab initio and tries to draw lessons from the international trading system's architecture for climate change mitigation negotiations. The UNFCCC has traditionally...

A two-tier climate club exploits the comparative advantage of large countries to mete out punishments through trade, while taking their capacity to resist punishment as a constraint. Countries outside the coalition price carbon at a fixed fraction of the average carbon price adopted within the...

An effective, legally binding, and enforceable climate club needs to be immediately created. The climate problem has become a threat to humankind. The historical perpetrators are the western countries, but today increasingly major developing countries. The climate-club solution may prove to be...

In a dynamic, three-region environmental multi-sector general equilibrium model (called EMuSe), we find that carbon pricing generates a recession initially as production costs rise. Benefits from lower emissions damage materialize only in the medium to long run. A border adjustment mechanism...