Why the traditional “pledge and review” climate agreements have failed, and how carbon pricing, based on trust and reciprocity, could succeed.

After twenty-five years of failure, climate negotiations continue to use a “pledge and review” approach: countries pledge (almost anything), subject to (unenforced) review. This approach ignores everything we know about human cooperation. In this book, leading economists describe an alternate model for climate agreements, drawing on the work of the late Nobel laureate Elinor Ostrom and others. They show that a “common commitment” scheme is more effective than an “individual commitment” scheme; the latter depends on altruism while the former involves reciprocity (“we will if you will”).

The contributors propose that global carbon pricing is the best candidate for a reciprocal common commitment in climate negotiations. Each country would commit to placing charges on carbon emissions sufficient to match an agreed global price formula. The contributors show that carbon pricing would facilitate negotiations and enforcement, improve efficiency and flexibility, and make other climate policies more effective. Additionally, they analyze the failings of the 2015 Paris climate conference.

Contributors
Richard N. Cooper, Peter Cramton, Ottmar Edenhofer, Christian Gollier, Eloi Laurent, David JC MacKay, William Nordhaus, Axel Ockenfels, Joseph E. Stiglitz, Steven Stoft, Jean Tirole, Martin L. Weitzman

Why the traditional “pledge and review” climate agreements have failed, and how carbon pricing, based on trust and reciprocity, could succeed.

Preface xi Three Introductory Chapters 1 Why Paris Did Not Solve the Climate Dilemma 1 Richard N. Cooper, Peter Cramton, Ottmar Edenhofer, Christian Gollier, Éloi Laurent, David JC MacKay, William Nordhaus, Axel Ockenfels, Joseph Stiglitz, Steven Stoft, Jean Tirole, and Martin L. Weitzman 2 Price Carbon—I Will If You Will 7 David JC MacKay, Peter Cramton, Axel Ockenfels, and Steven Stoft 3 Reflections on the International Coordination of Carbon Pricing 13 Ian W. H. Parry Nine Perspectives on Cooperation and Global Carbon Pricing 4 Global Carbon Pricing 31 Peter Cramton, Axel Ockenfels, and Steven Stoft 5 The Case for Pricing Greenhouse Gas Emissions 91 Richard N. Cooper 6 Overcoming the Copenhagen Failure with Flexible Commitments 99 Joseph E. Stiglitz 7 Climate Clubs and Carbon Pricing 109 William Nordhaus 8 How a Minimum Carbon-Price Commitment Might Help to Internalize the Global Warming Externality 125 Martin L. Weitzman 9 Climate Policy at an Impasse 149 Ottmar Edenhofer and Axel Ockenfels 10 Effective Institutions against Climate Change 165 Christian Gollier and Jean Tirole 11 From the Paris Agreement to the Carbon Convergence 205 Éloi Laurent 12 An International Carbon-Price Commitment Promotes Cooperation 221 Peter Cramton, Axel Ockenfels, and Steven Stoft Acknowledgments 243 Index 245