From folk theorems, we know that sufficiently patient players in a prisoner’s dilemma are able to sustain the first-best outcome as a subgame perfect Nash equilibrium. In the context of climate change, this means that, for patient countries, the loss of future cooperation is so large that short-run opportunistic increases in emissions today do not pay. Unfortunately, as we have learned from 30 years of climate negotiations, this theoretical insight does not easily transfer into reality.
Because we do not like where the rules of the game take us, we need to change them.
Kerr, Suzi, Steffen Lippert and Edmund Lou. 2018. "Transfers, self-enforcing agreements and climate cooperation." Coalition Theory Network, From Theory to Application, CTN.
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