Climate Agreements Do Not Reduce Emissions in a Climate Change Experiment

• In Event: Climate Change and International Collaboration

Abstract

Can climate accords based on decentralized and voluntary agreements successfully reduce carbon emissions? We designed an economic experiment with a 2x3 factorial design to study the effectiveness of the best-known mechanisms to foster international cooperation on climate change mitigation: climate pledges, financial penalties, and reputation. We test each of these mechanisms both separately and together. In the climate pledge treatments, participants could pledge their desired emissions target, approved by majority vote. In the treatments with financial penalties, failure to meet pledges triggered monetary sanctions. In the reputation treatments, participants could evaluate each other, which determined who will receive an additional nonmonetary environmental prize. We find that most participants joined climate agreements and met their pledges, but pledges were insufficiently ambitious to curb climate change. Neither the pledges, the financial penalties nor the competition for reputation reduced emissions. These results question the effectiveness of the current climate agreements and call for more effective alternatives.

Author

• Alessandro Del Ponte, The University of Alabama