Heterogeneity and global climate action

Abstract

Responses to climate change differ between countries yet the impact of these differences on the evolution of global climate action has not been analysed to date. This paper addresses two related questions: (i) what is the role of the variation of preferences in the global political economy of climate action; and (ii) what are the necessary conditions for sustained high levels of global action? The authors develop a model to assess countries’ choices at different times to either take action to reduce emissions or not. They find that countries’ choices are influenced by their current level of emissions, total participation in climate action, and other idiosyncratic factors. The heterogeneity between countries is caused by income inequality, differing vulnerability to climate damage, and other political economy factors. The model’s key result is that sustained high levels of global action are achieved only if there is a low degree of heterogeneity in countries’ preferences for action and a strong peer pressure effect to act.