Chapter 10: Decentralised control of greenhouse gas emissions: coordination and cooperation

Byline: Hans W. Gottinger In Chapter 2, we considered the difficulties of obtaining international cooperation in the control of CO2 emissions. The approach adopted in this chapter assumes there is an empoweredE United Nations, as a principal, that coordinates its members (agents) toward a common goal, which makes this a team-like principal agent structure. We shall show that if at least two countries commit themselves to cooperative behaviour through a team they will arrive at optimal welfare for each of them. This is particularly true if one of them acts as principal, a group of countries or an empowered United Nations and the other as an agent, e.g. a smaller country, both of which have different information structures.