Essays on climate change

Malova, Anna (2024) Essays on climate change. PhD thesis, University of Glasgow.

Abstract

This thesis attempts to provide practical policy recommendations that may make a difference in the climate crisis. It is, therefore, grounded in non-cooperative game theory, and the author regards its simplicity as a virtue rather than a hindrance. By no means does it offer a comprehensive solution, but merely recommendations that are easy to implement.

Chapter 1 focuses on approaches to reform implementation in the face of political constraints, such as a net-zero transition. In a simple three-period model where a welfare-enhancing reform may never be implemented, we show how a winning coalition of voters can be identified and constructed before reform is proposed to enable its implementation. When domestic mobility frictions are small, the reform can be implemented immediately. Alternatively, in certain settings, a winning coalition of voters serves as a commitment device underpinning the credibility of a proposal to implement reform with delay. If nations are part of a network, the transition may be engineered in a small number of pivotal members, which will lower the cost of transition for other members and ensure the transition across all countries. We propose many different ways to identify and leverage a pivotal group of voters or countries.

In Chapter 2, we turn to the role of unilateralism and how it can be used to lower global emissions more effectively. In a model with n countries, we prove that the core is empty and thus, no multilateral agreement with full participation is immune to deviations. Extending the model to include technological spillovers in the form of discontinuity in the investment cost if enough nations adopt the technology early on leads to multiple subgame perfect equilibria, among which is a stable grand coalition. We survey the literature for ways to introduce technological trade, discuss the role of an international environmental treaty under these conditions and provide some policy implications.

Chapter 3 looks at a non-cooperative game of three interacting nations who pollute, consume, invest and bear delayed cost of their choices. The novelty of the model is in separating environmental damage into two terms, local and global, so that the two stocks have different effects on nations’ payoffs. Instead of assuming that some countries would adopt new technology earlier than others, this approach provides a rationale for such choice. It is evident that already today, the consequences of climate change can be felt, but some countries have it worse than others, so the nations with greater present environmental damage will be the first to invest. Comparative statics suggests that merely an option of technological trade is enough to convince some nations to invest in green technology, but the country must be large in terms of its share of global emissions and suffer from local pollution already at present. Under these circumstances, China is a reasonable candidate for the role of global transition leader.

• Item Type: Thesis (PhD)
• Qualification Level: Doctoral
• Subjects: G Geography. Anthropology. Recreation > GE Environmental Sciences; H Social Sciences > HB Economic Theory
• Colleges/Schools: College of Social Sciences > Adam Smith Business School
• Supervisor's Name: Ghosal, Professor Sayantan and Hanley, Professor Nicholas
• Date of Award: 2024
• Depositing User: Theses Team
• Unique ID: glathesis:2024-84535
• Copyright: Copyright of this thesis is held by the author.
• Date Deposited: 03 Sep 2024 11:24
• Last Modified: 03 Sep 2024 11:25
• Thesis DOI: 10.5525/gla.thesis.84535
• URI: https://theses.gla.ac.uk/id/eprint/84535