On the impact of cross-country imitation on climate change: A game-theoretical analysis

Abstract

As far as climate change is concerned, a recurrent question that is asked either at the government or a consumer level is: Why should I make efforts to reduce my CO${}_{\text{2}}$ emission levels whereas the others will not make these efforts? The present paper provides qualitative elements to this question when asked at the government level. More precisely, we assume that each country wants to maximize a tradeoff between an individual benefit brought by emitting CO${}_{\text{2}}$ and an economical damage due to climate change while being influenced by the reduction strategies of the other countries. The influence term is key for the analysis and enables more virtuous or cooperative behavior. Mathematically speaking, the contribution of this paper is: to propose an abstracted model of a complex decision problem; to integrate an abstracted model of climate change in the game of interest; to conduct the complete Nash equilibrium analysis of the proposed game (existence, uniqueness, expression, quantitative analysis); to conduct a detailed numerical analysis to quantify the discussed aspects such as the impact of cross-country imitation on the atmospheric global temperature in 2100.