Climate change: the global public good

Climate change is the exemplary global public good, because each country’s emissions of greenhouse gases contribute cumulatively to the increase of the overall concentration, and each country’s abatements entail higher cost than benefit, unless effective concerted collective actions take place. Unfortunately there are weak political and economic instruments for entering a climate agreement and for attaining and maintaining its goals. Moreover there are strong free-riding incentives since it is quite difficult - and indeed very unpopular - for governments to convince people to give up part of their current wealth for the sake of uncertain gains in the future, maybe accruing to population in remote distance. In this paper I deal with the main issues put forward by the global public good nature of climate change. Namely, I firstly shed some light on the economics of global warming in order to point out a benefit-cost framework suitable for quantifying its impacts. Then, I analyse the determinants of the provision of climate stability and the international collective action that should be undertaken to compel sovereign countries to enter into a climate agreement. Hence, after outlining the most important approach to international cooperation, I consider the possibility of a coalition formation according to the game theoretic perspective, the interests determining the participation in international agreements, and the possible sanctions imposable to countries that refuse to comply with an international climate agreement.