Because abatement of global climate change is a public good, independent national actions may not produce the efficient quantity. Using a numerical integrated-assessment model, abatement costs and damages induced by climate change are compared at the cooperative and noncooperative solutions to a set of two-party dynamic games between the industrialized and developing countries. Games with perfect and imperfect information about climate and economic factors are considered. Across 144 games with perfect information, incorporating different values of climate and economic parameters, the noncooperative solution usually yields global benefits comparable to those of the cooperative solution. In about one-fifth of these games, however, a [...]
