Climate Leadership by Conditional Commitments

By Leif Helland, Jon Hovi and Håkon Sælen

Published in Oxford Economic Papers, online 25 September 2017

Abstract

Under the 2015 Paris climate agreement, each party sets its own mitigation target by submitting a Nationally Determined Contribution (NDC) every five years. An important question is whether including conditional components in NDCs might enhance the agreement’s effectiveness. The authors report the results of a closely controlled laboratory experiment—based on a mixed sequential-simultaneous public good game with one leader and three followers—that helps answer this question.

The experiment investigates how two factors influence the effectiveness of leadership based on intrinsically conditional commitments. Measuring effectiveness in terms of followers’ and total contributions, the authors find that it may help if the conditional promise is credible and if its implementation influences followers’ welfare substantially. Importantly, however, for both factors we find a significant effect only if the leader does not reap disproportionate gains from the group’s efforts.

These findings have important implications concerning the future success of the Paris Agreement.

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Published Oct. 23, 2017 2:32 PM - Last modified Oct. 23, 2017 2:32 PM