by Jim Rose in climate change, economics, environmental economics, politics, Thomas Schelling Tags: credible commitments, free riding, international collective action, treaty negotiations

I found the best writer on global warming to be Thomas Schelling. Schelling has been involved with the global warming debate since chairing a commission on the subject for President Carter in 1980.

Schelling is an economist who specialises in strategy so he focuses on climate change as a bargaining problem. Schelling drew from his experiences with the negotiation of the Marshall Plan and NATO.

International agreements rarely work if they talk in terms of results. They work better if signatories promise to supply specific inputs – to perform specific actions now.

Individual NATO members did not, for example, promise to slow the Soviet invasion by 90 minutes if it happened after 1962.

NATO members promised to raise and train troops, procure equipment and supplies, and immediately deploy these assets geographically. All of these actions can be observed, estimated and compared quickly. The NATO treaty was a few pages long.

The Kyoto Protocol commitments were not based on actions but on results, to be measured after more than a decade and several elections and a recession or two in between.

Climate treaties should promise to do certain actions now such as invest in R&D and develop carbon taxes that return the revenue as tax cuts. If the carbon tax revenue is fully refunded as tax cuts, less reliable countries, in particular, have an additional incentive to collect the carbon tax properly to keep their budget deficits under control.