Topic 4: Climate Change Economics

Question 1

pledges are made independently. This
is the classic public goods game, in which the rational selfish strategy is to
contribute nothing, because this makes a player better off no matter what the
others do

Answer 1

individual-commitment

Question 2

players condition their contributions on
others’ pledges: everyone makes a pledge and all contribute the amount of the
lowest pledge. This changes everything. Every player pledges $10, because the
common commitment protects against free-riding.

Answer 2

common-commitment

Question 3

what is needed to transfer funds from rich to poor
countries. Unavoidably, the green fund destroys the simplicity of a
single-dimensional negotiation.

Answer 3

“Green Climate Fund”

Question 4

what allows us to change perspective and consider the strategic
incentives of countries, firms, and individuals.

Answer 4

game
theory

Question 5

excludable but non-rivalrous, at least until reaching a point where congestion occurs. Often these goods exhibit high excludability, but at the same time low rivalry in consumption

Answer 5

club good

Question 6

beach and a restaurant (have a maximum capacity) are examples of

Answer 6

club goods

Question 7

what type of model maps emissions to a path for
CO2 concentration and describes how this path affects the climate.

Answer 7

carbon-circulation and climate model