Incomplete Cooperation and Co-Benefits: Deepening Climate Cooperation with a Proliferation of Small Agreements

Abstract

Case study and model results lend some optimism for the potential of small coalitions with partially excludable public goods to substantially deepen international cooperation on energy and climate issues. Drawing motivation from other issue areas in international relations ranging from nuclear non-proliferation, transboundary air pollution and liberalized trade, we use an evolutionary-game-theoretic model to analyze regimes that yield domestic incentives to contribute to public goods provision (co-benefits). Co-benefits may be limited, but can create a nucleus for formation of coalitions that grow while deepening provision of global public goods. The Climate and Clean Air Coalition (CCAC) is a prime example of an agreement that employs partially excludable club benefits to deepen cooperation on non-CO2 greenhouse gases. Our game-theoretic results support two important insights for the building blocks approach to addressing climate change: sustained cooperation in club agreements is possible even when public goods are not entirely excludable and some members of the population free ride; and second, cooperation in small club configurations yields larger non-excludable public goods benefits than cooperation in more inclusive forums. This paper lends positive support that a proliferation of small agreements under a building blocks approach at the UNFCCC may be more effective (not just more likely) for deepening climate change cooperation than a fully inclusive approach.

Keywords: Building blocks, climate cooperation, co-benefits, coalitions, evolutionary-game-theory

JEL Classification: C71, C72, C73, Q20, Q28, K33