Leadership in Climate Change Mitigation: Consequences and Incentives

Initiatives in favor of unilateral action on climate change are frequently challenged with concerns for free riding. Nevertheless, we observe an increasing number of unilateral efforts at different administrative levels and in different parts of the world. Previous academic literature described various individual mechanisms where internationally emissions may increase or decrease as a reaction to unilateral emission reductions. We collect a comprehensive set of both positive and negative reactions and analyze them in stylized models. This allows us to identify the most important characteristics which determine the effectiveness of a leader. We find that leadership efforts are most likely to succeed if a country (i) has a high ability to generate knowledge through its leadership, (ii) has a high degree of credibility in the international community and (iii) has a similar economic structure to the most important emitters. While most effects are difficult to quantify, the comprehensive assessment suggests that leakage effects resulting from unilateral mitigation may well be outweighed by positive reactions.

Dr. Schwerhoff is a post-doctoral researcher at the Mercator Research Institute on Global Commons and Climate Change (MCC) in Berlin. He works on the interaction of climate change mitigation with economic development and public finance. Gregor Schwerhoff holds a M.Sc. in mathematics from the Université Paris-Sud 11 and a PhD in economics from the University of Bonn.