Pledge-and-review bargaining: From Kyoto to Paris

Abstract

To improve on global climate policies, we must better understand past and present treaties. The agreements signed in Kyoto (1997) and Paris (2015) are associated with different bargaining procedures, participation levels, and enforcement mechanisms. The choice of procedure changed over time, and yet the commitment period length was and is five years. To shed light on these five facts, this paper presents a dynamic game with endogenous technology, participation, enforcement, contract terms, and bargaining procedure. The theoretical predictions are consistent with all five facts.