A Good Opening: The Key to Make the Most of Unilateral Climate Action

In this paper we argue that when a subgroup of countries cooperate on emission reduction, the optimal response of non-signatory countries reflects the interaction between three potentially opposing factors, the incentive to free-ride on the environmental benefits of cooperation, the incentive to expand energy consumption, and the incentive to adopt the cleaner technologies introduced by the coalition.Using an IntegratedAssessmentModelwith a game-theoretic structure we find that the equilibrium abatement of the coalition composed by OECD countries would be moderate, in line with the Pledges subscribed in Copenhagen, but increasing.