Munich Personal RePEc Archive

Designing a Climate Agreement for the Reality of Self-interested and Short-term Oriented Nations

Cseh, Arpad (2016): Designing a Climate Agreement for the Reality of Self-interested and Short-term Oriented Nations.

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The global and long-term nature of climate change conflicts with the reality of self-interested and short-term oriented nations. International negotiations have failed to reach an agreement that achieves effective mitigation, as this dual conflict has not been resolved. This paper proposes an alternative approach to international cooperation, one designed with the conflicting self-interests and short-termism in mind. Key elements of the proposed framework are: establishing a new international treaty and fund; determining a benchmark emission path for each country as well as a carbon price; paying countries annually through the fund for reducing emissions below their benchmark levels as opposed to penalizing them for higher emissions; financing the fund’s annual payments by raising capital from private investors; and repaying the private capital in the long-term using contributions from participating countries. The benefits of this approach include that reaching an international agreement becomes more realistic, self-interest and short-termism are transformed from obstacles into drivers of climate change mitigation and additional financing is created to support the necessary investments. Cutting emissions, currently a burden to be shared among countries in a zero sum game, turns into an opportunity.

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