How Crucial is Cooperation in Mitigating World Climate? Analysis with World-MARKAL |
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Authors: | Maryse Labriet Richard Loulou |
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Institution: | 1. Group for Research in Decision Analysis (GERAD) and University of Quebec in Montreal, 3000 chemin de la C?te-Ste-Catherine, Montréal, QC, H3T 2A7, Canada 2. Group for Research in Decision Analysis (GERAD) and McGill University, Montréal, 3000 chemin de la C?te-Ste-Catherine, Montréal, QC, H3T 2A7, Canada
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Abstract: | In order to study the conditions for a World self-enforcing agreement on climate change, we model cooperative and non-cooperative
World climate strategies with an integrated version of the 15-region techno-economic MARKAL model in which abatement costs
and climate related damages are both included. We first explain why the use of a technology oriented model may add value to
the analysis of global GHG strategies. Based on the empirical finding of linear cumulative climate damages, the computation
of Nash equilibrium can be reduced to solving a series of 15 independent linear programs, one per region. Moreover, assuming
interregional transfers to share the global surplus of cooperation, our work adopts the point of view of dynamic partial equilibrium
computation coupled with cooperative game-theoretic principles. The results illustrate how the non-cooperative strategy is
closer to the base case than to the cooperative strategy, and the amount of side-payments sufficient to guarantee the stability
of the cooperative strategy are calculated with four different rules. The internal (in)stability of farsighted coalitions
without transfers (non-cooperation) is also analyzed. The current project appears to be the first one of the sort using a
large and detailed technology explicit model such as MARKAL. |
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Keywords: | Climate change Technico-economic modelling MARKAL Energy Game Theory World cooperation Burden-sharing |
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